1. Consider two projects:

Project A Project B

• PP 2.2 years 2.8 years
• IRR 12.5% 18.3%
• NPV -$15,500 $16,900

Assume that the projects both have a required return of 14% and a critical acceptance level (T) of 2.6 years. If these are independent projects we should

2.

Consider the following probability distribution

• Probability Return
• 0.10 -100%
• 0.20 -10%
• 0.50 20%
• 0.20 100%

Calculate the standard deviation for this security.