Answer P8-5 and p8-8

LG 2 P8-5 Risk and probablity Micro-Puh, Inc., is considering the purchase of one of two microfim cameras R and S. Both should prowide benefits over a 10-year period, and each requires an initial investment of $4,000. Management has constructed the accompanying tabkle of eatmates of rates of return and probabilities for pessimistic, most likely, and optimistic results a. Determine the range for the rate of return for each of the two cameras h. Determine the expected salue of return for each camera c Purchase of which camera is riskier? Why? Camera R Canmera S Amount Prohablity 54,000 54000 1.00 Inzial investment Annual tae of netam ?00 Most kkelh Opsmists 20% 25% 0.25 0.50 025 15% 25% 35% .20 0.55 0.25