Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

.. OMANTEL 74% 8:43 AM b- What is risk and uncertainty? How would you differentiate between Objective Probabilities and Subjective Probabilities? (2.5 Marks) 16. The

image text in transcribed
image text in transcribed
.. OMANTEL 74% 8:43 AM b- What is risk and uncertainty? How would you differentiate between "Objective Probabilities" and "Subjective Probabilities"? (2.5 Marks) 16. The management of Yafraid International is considering new two-year project to establish new set of electronic parts for one of its buyer. The probability distribution of this project in two years is given below: Year 1 Return 12,000 15,000 18,000 Probability 0.15 0.54 0.31 Returi 6.000 12.00 The events in each year are independent of other years (that is, there are no conditional probabilities). An outlay of OMR 22,500 is payable at Time 0 and the other cash flows are receivable at the year ends. The risk-adjusted discount rate is 9.5 per cent. Calculate: a). The expected NPV: (2.5 Marks) b). The standard deviation of NPV: (2.5 Marks) 16. The management of Yafraid International is considering new two-year project to establish new set of electronic parts for one of its buyer. The probability distribution of this project in two years is given below: Year 1 Return 12,000 15,000 18,000 Probability 0.15 0.54 0.31 Returi 6,000 12,000 The events in each year are independent of other years (that is, there are no conditional probabilities). An outlay of OMR 22,500 is payable at Time 0 and the other cash flows are receivable at the year ends. The risk-adjusted discount rate is 9.5 per cent. Calculate: a). The expected NPV: (2.5 Marks) b). The standard deviation of NPV: (2.5 Marks) .. OMANTEL 74% 8:43 AM b- What is risk and uncertainty? How would you differentiate between "Objective Probabilities" and "Subjective Probabilities"? (2.5 Marks) 16. The management of Yafraid International is considering new two-year project to establish new set of electronic parts for one of its buyer. The probability distribution of this project in two years is given below: Year 1 Return 12,000 15,000 18,000 Probability 0.15 0.54 0.31 Returi 6.000 12.00 The events in each year are independent of other years (that is, there are no conditional probabilities). An outlay of OMR 22,500 is payable at Time 0 and the other cash flows are receivable at the year ends. The risk-adjusted discount rate is 9.5 per cent. Calculate: a). The expected NPV: (2.5 Marks) b). The standard deviation of NPV: (2.5 Marks) 16. The management of Yafraid International is considering new two-year project to establish new set of electronic parts for one of its buyer. The probability distribution of this project in two years is given below: Year 1 Return 12,000 15,000 18,000 Probability 0.15 0.54 0.31 Returi 6,000 12,000 The events in each year are independent of other years (that is, there are no conditional probabilities). An outlay of OMR 22,500 is payable at Time 0 and the other cash flows are receivable at the year ends. The risk-adjusted discount rate is 9.5 per cent. Calculate: a). The expected NPV: (2.5 Marks) b). The standard deviation of NPV: (2.5 Marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Mutual Fund Industry Handbook

Authors: Gremillion

1st Edition

0471736244, 978-0471736240

More Books

Students also viewed these Finance questions