Excel Online Structured Activity: Project risk analysis

distributions:

Open spreadsheet

a$.$ What is each project's expected annual cash flow? Round your answers to two decimal places.

Project A: $

Project B: $

Project $B\text{'}$s standard deviation $({}_B)$ is $$5,443\mathrm{.}80$ and its coefficient of variation $(C{V}_B)$ is $0\mathrm{.}73.$ What are the values of $({}_A)$ and $(C{V}_A)?$ Round your answers to two decimal places.

${}_A=$$

$C{V}_A=$

b$.$ Based on the risk$-$adjusted NPVs$,$ which project should BPC choose?

c$.$ If you knew that Project B$\text{'}$s cash flows were negatively correlated with the firm's other cash flow, but Project A$\text{'}$s cash flows were positively correlated, how might this affect the decision?

If Project B$\text{'}$s cash flows were negatively correlated with gross domestic product $($GDP$),$ while A$\text{'}$s cash flows were positively correlated, would that influence your risk assessment?