Problem #2 Given the cash flow for two projects in the following table, determine (based on Net Present worth) which project we should take. What is the probability that we will lose money (risk %) if we select Project #1 End of year Project Mean value of cash flow Prob. Distribution /Std. Deviation(2) 1 1 -32000 $ 0 2 1 10000 Normal (Std. deviation $ 900) 3 1 9500 Normal ( " " " " " $1200) 4 1 8000 Normal ( " " " " " $1400) 1 2 -36000 $0 2 2 15000 Uniform ($12000 - $18000) 3 2 12000 Uniform ($10000 -$14000) 4 2 9000 Normal (Std. deviation = $1200) (1): You may use the method explained in the textbook, other sources or the one I have explained in the tutorial which Is uploaded to the course site now (2): The probability distribution of the cha flows ae either Normal (Mean and Std. Deviation given) or Uniform with given Max and min. values. In the Risk analysis tutorial, it is shown that to generate random values from a Normal Probability distribution or uniform distribution, we use the excel functions NORMINV(rand(), Mean, Std. Deviation) and RANDBETWEEN( Min, Max) Respectively. NOTE: The value of Net Present Worth calculated using this method is always assumed to have a normal distribution