Eclipse Sun Products (ESP) must choose between two asset purchases The annual rate of return and related probabilities given below summarize the firms analysis Asset A Asset B Rate of Return Probability Rate of Return Probability 8 20 7 20 13 60 17 60 18 20 27 20 a For each project compute (1) The expected rate of return (2) The standard deviation of the expected return (3) The coefficient of variation of the return b Which asset should ESP select

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Question: Eclipse Sun Products (ESP) must choose between two asset purchases. The annual rate of return and related probabilities given below summarize the firms analysis. Asset

Eclipse Sun Products (ESP) must choose between two asset purchases. The annual rate of return and related probabilities given below summarize the firms analysis.

Asset A		Asset B
Rate of Return	Probability	Rate of Return	Probability
8%	20%	7%	20%
13%	60%	17%	60%
18%	20%	27%	20%

a. For each project compute:

(1) The expected rate of return.

(2) The standard deviation of the expected return.

(3) The coefficient of variation of the return.

b. Which asset should ESP select?

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