Question: The Bartram-Pulley Company (BPC) must decide between two mutually exclusive investment projects. Each project costs $7,000 and has an expected life of 3 years. Annual

The Bartram-Pulley Company (BPC) must decide
The Bartram-Pulley Company (BPC) must decide between two mutually exclusive investment projects. Each project costs $7,000 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 Net Cash Probability Net Cash Flows Flows 0.2 $6,000 0.2 $ 0 0.6 6,750 0.6 6,750 0.2 7,000 0.2 18,000 BPC has decided to evaluate the riskier project at a 13% rate and the less risky project at a 10% rate. a. What is the expected value of the annual net cash flows from each project? Do not round intermediate calculations. Round your answers to nearest dollar. Project A Project B Net cash flow $ 6650 $ 7650 What is the coefficient of variation (CV)? Do not round intermediate calculations. (Hint: og=$5,798 and CVB=$0.76.) o (to the nearest CV (to 2 decimal whole number) places) Project A $ 339 0.05 Project B $ 5797 0.75

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