Question
19) Mountain Ski Corp. was set up to take large risks and is willing to take the greatest risk possible. Lakeway Train Co. is more
19)
| Mountain Ski Corp. was set up to take large risks and is willing to take the greatest risk possible. Lakeway Train Co. is more typical of the average corporation and is risk-averse. |
| Projects | Returns: Expected Value | Standard Deviation | ||||
| A | $ | 319,000 | $ | 209,000 | ||
| B | 728,000 | 502,000 | ||||
| C | 109,000 | 100,000 | ||||
| D | 222,000 | 306,000 |
| a-1. | Compute the coefficients of variation.(Round your answers to3decimal places.) |
| Coefficient of Variation | |
| Project A | |
| Project B | |
| Project C | |
| Project D |
| a-2. | Which projects should Mountain Ski Corp. choose? | ||||
|
| b. | Which one of the four projects should Lakeway Train Co. choose based on the same criteria of using the coefficient of variation? | ||||
|
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Fundamentals of Financial Management
Authors: Eugene F. Brigham
Concise 9th Edition
1305635937, 1305635930, 978-1305635937
