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Excel Online Structured Activity: Project risk analysis The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each costs $6,750 and has an expected

Excel Online Structured Activity: Project risk analysis

The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each costs $6,750 and has an expected life of 3 years. Annual project cash flows begin 1 year after the initial investment and are subject to the following probability distributions:

Project A Project B
Probability Cash Flows Probability Cash Flows
0.2 $6,250 0.2 $0
0.6 $6,750 0.6 $6,750
0.2 $7,250 0.2 $17,000

BPC has decided to evaluate the riskier project at 11% and the less-risky project at 10%. T

  1. What is each project's expected annual cash flow? Round your answers to two decimal places.

    Project A: $

    Project B: $

    Project B's standard deviation (B) is $5,443.80 and its coefficient of variation (CVB) is 0.73. What are the values of (A) and (CVA)? Round your answers to two decimal places.

    A = $

    CVA =

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