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hello! looking for help with just the parts i got wrong the green checks are correct but i need help with the red x's thank
hello! looking for help with just the parts i got wrong the green checks are correct but i need help with the red x's thank you!
eBook Problem 11-15 Risky Cash Flows The Bartram-Pulley Company (BPC) must decide between two mutually exclusive investment projects. Each project costs $6,750 and has an expected life of 3 years. Annual net cash flows from each project begin 1 year after the initial investment is made and have the following probability distributions: PROJECT A PROJECT B Probability Net Cash Probability Net Cash Flows Flows 0.2 $7,000 0.2 0 0.6 6,750 0.6 6,750 0.2 8,000 0.2 19,000 BPC has decided to evaluate the riskier project at a 12% rate and the less risky project at a 8 % rate . a. What is the expected value of the annual net cash flows from each project? Do not round intermediate calculations. Round your answers to nearest dollar. Project A Project B Net cash flow 7050 7650 What is the coefficient of variation (CV)? Do not round intermediate calculations. (Hint: og-$6,158 and CVe-$0.78.) a (to the nearest CV (to 2 decimal whole number) places) Project A 485 0.07 Project B 6759 0.76 b. What is the risk-adjusted NPV of each project? Do not round intermediate calculations. Round your answer to the nearest dollar. Project A 10036. Project B 11624. c. If it were known that Project B is negatively correlated with other cash flows of the firm whereas Project A is positively correlated, how would this affect the decision? Project B This would tend to reinforce the decision to accept If Project B's cash flows were negatively correlated with gross domestic product (GDP), would that influence your assessment of its risk? Yes Hide Feedback Partially Correct Step by Step Solution
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