The Bartram-Pulley Company (BPC) must decide between two mutually exclusive investment projects. Each project costs $6,750 and has an expected life of 3 years. Annual net cash flows from each project begin 1 year after the initial investment is made and have the following probability distributions:

PROJECT A		PROJECT B
Probability	Net Cash Flow	Probability	Net Cash Flow
0.2	$7,000	0.2	$ 0
0.6	6,750	0.6	6,750
0.2	8,000	0.2	16,000

BPC has decided to evaluate the riskier project at a 12% rate and the less risky project at a 8% rate.

What is the expected value of the annual net cash flows from each project? Round your answers to nearest dollar.

	Project A	Project B
Net cash flow	$ ________	$ ________

What is the coefficient of variation (CV)?

	? (to the nearest whole number)	CV (to 2 decimal places)
Project A	$ ________	________
Project B	$ ________	________

What is the risk-adjusted NPV of each project? Round your answer to the nearest dollar.

Project A		$ ________
Project B		$ ________

If it were known that Project B is negatively correlated with other cash flows of the firm whereas Project A is positively correlated, how would this affect the decision? This would tend to reinforce the decision to _________________ Project B. If Project B's cash flows were negatively correlated with gross domestic product (GDP), would that influence your assessment of its risk? _________________