2. The MB Company is considering investment in one of the following mutually exclusive projects. Cash inflows of foreseeable next 4 year are given below:

Cash inflows ($000)

Probability Project K Project L

0.15 4,250 4,250

0.20 4,750 5,250

0.30 5,250 6,250

0.20 5,750 7,250

0.15 6,250 8,250

2.a. Calculate the expected cash inflow and standard deviation of both project.

2.b. Which project has the greater risk, in terms of variation of coefficient and what other factors should be considered for selecting one of the mutually exclusive projects?