Question: (b) Millenium Sdn Bhd is analysing two projects. Project I will require initial outlay of RM25,000, while project 2 would require RM 28,000. Both projects

(b) Millenium Sdn Bhd is analysing two projects. Project I will require initial outlay of RM25,000, while project 2 would require RM 28,000. Both projects expected to have a useful life of four years. The cash flows of the project are as follows: Economic condition Probability Recession 0.25 Annual Cash flow Project 1 Project 2 RM 1,500 RM1,875 RM 2,810 RM 2,250 RM 3,375 RM 3,000 Normal 0.45 Boom 0.30 Based on the above information, calculate the following for each project: (i) expected annual cash flow (ii) standard deviation (iii) coefficient of variation (6 marks)
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