Question
Coefficient of variation Valley Forgings has identified four alternatives to meet its requirement for an additional production facility. The following table summarizes data gathered relative
Coefficient of variation Valley Forgings has identified four alternatives to meet its requirement for an additional production facility. The following table summarizes data gathered relative to each alternative.
| Alternative
| Expected return
| Standard deviation of return 6.5% |
| A | 18% | 6.5 |
| B | 22 | 11.2 |
| C | 15 | 5.0 |
| D | 12 | 3.5 |
- Calculate the coefficient of variation for each alternative
- If the firm wishes to minimise risk, which alternative would you recommend? why?
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Corporate Accounting
Authors: Maheshwari
6th Edition
9352718585, 978-9352718580
