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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
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)
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