Question: The Bartram-Pulley Company (BPC) must decide between two mutually exclusive investment projects. Each project costs $5,000 and has an expected life of 3 years. Annual

 The Bartram-Pulley Company (BPC) must decide between two mutually exclusive investment

The Bartram-Pulley Company (BPC) must decide between two mutually exclusive investment projects. Each project costs $5,000 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 Cash Flows Probability Cash Flows 0.2 $5,000 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 an 11% rate and the less risky project at a 10% rate. a. What is the expected value of the annual cash flows from each project? Do not round intermediate calculations. Round your answers to the nearest dollar. Project A Project B Net cash flow What is the coefficient of variation (CV)? (Hint: 0p=$5,096.57 and CVg=$0.70.) Do not round intermediate calculations. Round o values to the nearest cent and CV values to two decimal places. g CV $ Project A Project B b. What is the risk-adjusted NPV of each project? Do not round intermediate calculations. Round your answers to the nearest cent. $ Project A: $ Project B: c. 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 -Select- Project B. If Project B's cash flows were negatively correlated with gross domestic product (GDP), would that influence your assessment of its risk

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