Question: Need some home work help can you provide the steps to solve the problem and the solution. See below. Kyles Shoe Stores Inc. is considering
Need some home work help can you provide the steps to solve the problem and the solution. See below.
Kyles Shoe Stores Inc. is considering opening an additional suburban outlet. An after tax expected cash flow of $130 per week is anticipated from two stores that are being evaluated. Both stores have positive net present values. Which store site would you select based on the distribution of these cash flows? Use the coefficient of variation as your measure of risk.
| Site A | Site B | ||
| Probability | Cash Flows | Probability | Cash Flows |
| .3 | 80 | .2 | 50 |
| .3 | 130 | .2 | 80 |
| .1 | 160 | .3 | 130 |
| .3 | 170 | .1 | 180 |
|
|
| .2 | 235 |
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