Question: The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each costs $6,750 and has an expected life of 3 years. Annual project cash
The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each costs $6,750 and has an expected life of 3 years. Annual project cash flows begin 1 year after the initial investment and are subject to the following probability distributions:
| Project A | Project B | |||
| Probability | Cash Flows | Probability | Cash Flows | |
| 0.2 | $6,500 | 0.2 | $0 | |
| 0.6 | $6,750 | 0.6 | $6,750 | |
| 0.2 | $7,000 | 0.2 | $17,000 | |
BPC has decided to evaluate the riskier project at 11% and the less-risky project at 8%.
- What is each project's expected annual cash flow? Round your answers to two decimal places. Project A. $
Project B. $ Project B's standard deviation (?B) is $5,444 and its coefficient of variation (CVB) is 0.73. What are the values of (?A) and (CVA)? Round your answer to two decimal places. ?A = $ CVA =
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