Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Consider the probability distributions of the first year cash flows of two projects, Abantu General Dealers and Bobby's Enterprise: Abantu General Dealers Bobby's Enterprise

image text in transcribed

1. Consider the probability distributions of the first year cash flows of two projects, Abantu General Dealers and Bobby's Enterprise: Abantu General Dealers Bobby's Enterprise Possible cash flow Probability Possible cash flow Probability K'000 K'000 (5,000) 20% 10 000 30% (0) 40% (4000) 50% 7,000 40% (3000) 20% Required to: a) Calculate the range of possible cash flows for each project (5 marks) b) Calculate the expected cash flow for each project (5 marks) c) Calculate the standard deviation of the possible cash flows for each project ( 5 marks) d) Calculate the coefficient of variation of the possible cash flows for each project ( 3 marks) e) Comment on the outcome of these two projects (2 marks) Total marks (20 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cornerstones Of Financial Accounting

Authors: Bertrand Piccard, Jay Rich, Jeff Jones, Maryanne Mowen, Don Hansen, Nick Jones

1st Edition

0324657730, 9780324657739

More Books

Students also viewed these Finance questions

Question

Outline the main features of a responsibility accounting system.

Answered: 1 week ago

Question

Illustrate the link between business

Answered: 1 week ago