can anyone solve either C or D

2. Answer either part C or part D C. Two individuals are facing the same probability distribution for losses due to theft: Possible Losses Probability S0 $600 $1,000 30% 40% 30% ( Calculate the expected loss for each individual. (ii) If these two individuals enter into a pooling arrangement in which they share the losses equally, determine the new probability distribution facing each individual, i.e., show all the possible loss amounts and their associated probabilities. Also calculate the expected loss for each individual after the pooling arrangement is in place. Comparethe two probability distributions and use them to explain the benefits of pooling. (iii) Wood Warehousing has property insurance on a replacement cost basis. D. It can install sprinklers in its warehouse for an initial cost of$6,600. The sprinklers will last four years. Annual upkeep of the sprinklers will be S500 paid at the end of each year. If Wood installs the sprinklers, it will depreciate them on a straight line basis over three years. Without the sprinklers, the firm believes that its expected cash outflow for losses will be $4,000 per year and that its insurance premium will be $10,000 per year. With the sprinklers, it believes that its expected cash outflow for losses will be $2,000 per year and that its insurance premium will be Wood's opportunity cost of capital for this decision is 12 S9,500 per year. percent. Retained losses are paid and deductible for tax purposes at the end of each year. Insurance premiums are paid at the beginning of the year and are tax deductible. The tax rate is 40 percent. Should Wood install the sprinklers? Support your answer by calculating the net present value of installing the sprinklers. (Include any tax effects at the time of the associated cash flows.)