Two mutually exclusive investment projects are under consideration. It is assumed that the cash flows are statistically
Question:
TABLE PI2.24
(a) For each project, determine the mean and standard deviation of the NPW, using an interest rate of 15%.
(b) On the basis of the results of part (a), which project would you recommend?
Transcribed Image Text:
Project A Project B End of Year Mean Variance Mean Variance 0 $5,000 1,000 $10.000 2,000 4,000 1,000 6,000 1,500 2,000 4,000 1,500 8,000
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