Question 2 A. Micro Processors Ltd is in process of purchasing a high-tech machine for its production of microchips for the electronic industry. In its research, it has gathered the following information about two possible machines A and B. Both machines will be able to provide benefits over a ten-year period, and each required an investment of $10 000. Management has constructed the following table of estimates of rate of return and probabilities for Pessimistic, Most Likely and Optimistic results. Machine A Machine B State of nature Rate of Return Probability Rate of Return Probability Pessimistic 11% 0.30 9% 0.30 Most likely 18% 0.45 18% 0.45 Optimistic 22% 0.25 25% 0.25 Required: i. Compute expected rate of return for each machine. (4 marks) ii. Compute variance and standard deviation of rate of return for each machine. (4 marks) iii. Coefficient of variation for each machine (2 marks) iv. Recommend which machine the firm should purchase? (1 marks)