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1 1 Excel Online Structured Activity: Project risk analysis The Butler - Perkins Company ( BPC ) must decide between two mutually exclusive projects. Each

11 Excel Online Structured Activity: Project risk analysis
The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each costs $7,000 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 $6,5000.2 $0
0.6 $7,0000.6 $7,000
0.2 $7,5000.2 $18,000
BPC has decided to evaluate the riskier project at 12% and the less-risky project at 10%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.
Open spreadsheet
What is each project's expected annual cash flow? Round your answers to two decimal places.
Project A: $ fill in the blank 2
Project B: $ fill in the blank 3
Project B's standard deviation (\sigma B) is $5,775.81 and its coefficient of variation (CVB) is 0.74. What are the values of (\sigma A) and (CVA)? Round your answers to two decimal places.
\sigma A = $ fill in the blank 4
CVA = fill in the blank 5
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