Question: Mary Beth Clothes is considering opening an additional suburban outlet. An aftertax cash flow of $170 per day (expected value) is projected for each of
Mary Beth Clothes is considering opening an additional suburban outlet. An aftertax cash flow of $170 per day (expected value) is projected for each of the two locations being evaluated.
| Site A | Site B | ||||||||||||||
| Probability | Cash Flows | Probability | Cash Flows | ||||||||||||
| 0.20 | $90 | 0.10 | $50 | ||||||||||||
| 0.30 | 170 | 0.20 | 90 | ||||||||||||
| 0.30 | 180 | 0.10 | 170 | ||||||||||||
| 0.20 | 235 | 0.40 | 190 | ||||||||||||
| 0.20 | 270 | ||||||||||||||
| Expected value | $170 | Expected value | $170 | ||||||||||||
a. Compute the coefficient of variation for each site. (Do not round intermediate calculations. Round the final answers to 4 decimal places.)
| Coefficient of variation | |
| Site A | |
| Site B | |
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