Question: Four project cash flows result in four NPV distributions whose mean and standard deviations are given. Which of the four projects should be selected in

Four project cash flows result in four NPV distributions whose mean and standard deviations are given. Project Mean Std. deviation 20 2 123 + 4 5 15 17

Which of the four projects should be selected in order to:

a. Maximize the mean of the NPV distribution.

b. Minimize the probability of a loss.

Project Mean Std. deviation 20 2 123 + 4 5 15 17 15 7 12 212 16

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