Question: Question 4 (15 MARKS) Suppose there are two projects (A and B) and the project cash flows are given below: State of Economy Probability of

Question 4 (15 MARKS) Suppose there are two projects (A and

Question 4 (15 MARKS) Suppose there are two projects (A and B) and the project cash flows are given below: State of Economy Probability of Cash Flow Project Cash Flow Project Outcome A . B Strong 0.20 700 550 Normal 0.50 400 400 Weak 0.30 200 300 a) Calculate i) the return for project A and project B. (4 marks) ii) the risk and return for project A and project B. (8 marks) b) Decide on which project would you select. State your reasons. (3 marks) -END OF ASSIGNMENT 2

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