Mike Riskless is considering two projects. He has estimated the IRR for each under three possible scenarios and assigned probabilities

of occurrence to each scenario.

Riskless is aware that the pattern of returns for Investment II looks very attractive relative to Investment I; however, he believes that

Investment II could be more risky than Investment I. He would like to compare the two investments considering both the risk and

return on each.

Required:

a$.$ Compute BTIRR under each of the three possible scenarios.

b$.$ Compute variance and standard deviation of the IRRs.

Complete this question by entering your answers in the tabs below.

Required $A$

Compute BTIRR under each of the three possible scenarios.