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help The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each project has an initial after-tax cash outflow of s7, ooo and has
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The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each project has an initial after-tax cash outflow of s7, ooo and has expected life of 3 years. Annual project aftertax cash flows begin 1 year after the initial investment and are subject to the foliowing probabirity distributions: BpC has decied to evaluate the tisiber project at 11% and the less-risky project at 996 . a. What is each project's expected annual aftertax cash flew? Round your answers to the nearest cent. Project At Project B; Project Bs standard deviation (OB) is $5,776 and its coefficlent of variation (CV) ) is 0.74 . What are the values of of and CVA? Do not round intermediate calculations. Rosnd vour answer for standard deviation to the nesrest cent and for coeficlent of variation to two decimal places. 0x CVM B. Based on the risk-adyusted Nevs, which project thould BAc choose? c. If you kntw that Project B's cash fows were negatively correlated with the firm's other cash flows, but Project A's cash Aows were postively correlated, how miaht this affect the decision? If Project B's cash flows were negatively correiated with gross domestic product (GDP), while A's cash flows Were poutively correlated, would that inhuence vourinsk assessment Step by Step Solution
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