isk analysis Solar Designs is considering an investment in an expanded product line. Two possible types of expansion are under en w. After investigating the possible outcomes, the company made the estimates shown in he following tableThe pessimistic and optimistic outcomes occur with a probablity of 25%, and the most likely outcome occurs with a probability of 50%. a. Determine the range of the rates of return for each of the two projects b. Which project is less risky? . If you were making the investment decision, which one would you choose? what does this imply about your feelings toward risk? d. Assume that expansion B's most likely outcome is 21% per year and that all other facts remain the same. Does this change your answer to part c? a. The range for the rate of return for expansion A is 11-29 The range for the rate of return for expansion B is 13-27 b. Which project is less risky? (Select from the drop-down menus) %. (Round to the nearest whole number) Round to the nearest whole number.) is less risky because it has arange for the rate of return c. f you were making the inwestment decision, which one would you choose? What does this imply about your feelings toward risk? Select the best answer below.) O A. Since the average return for both projects is the same and the initial investments are equal, the answer depends on your risk preflerence. Since the returns on Project B are more volatile, so a risk-averse investor would prefer Project A O B. Since the most likely return for both projects is the same, you can choose either project regardless of your risk preference. O C. Choose expansion B because it is less risky and thus a better investment O D. Choose expansion A because it has a higher optimistic rate of returm regardless of its risk. d. Assume that expansion B's most likely outcome is 21% per year and t an other facts remain the same. Does this change your answer to part c? (Select the best answer below) OA. No Click to select your answerls). 2 3 4 5 6 tab isk analysis Solar Designs is considering an investment in an expanded product line. Two possible types of expansion are under en w. After investigating the possible outcomes, the company made the estimates shown in he following tableThe pessimistic and optimistic outcomes occur with a probablity of 25%, and the most likely outcome occurs with a probability of 50%. a. Determine the range of the rates of return for each of the two projects b. Which project is less risky? . If you were making the investment decision, which one would you choose? what does this imply about your feelings toward risk? d. Assume that expansion B's most likely outcome is 21% per year and that all other facts remain the same. Does this change your answer to part c? a. The range for the rate of return for expansion A is 11-29 The range for the rate of return for expansion B is 13-27 b. Which project is less risky? (Select from the drop-down menus) %. (Round to the nearest whole number) Round to the nearest whole number.) is less risky because it has arange for the rate of return c. f you were making the inwestment decision, which one would you choose? What does this imply about your feelings toward risk? Select the best answer below.) O A. Since the average return for both projects is the same and the initial investments are equal, the answer depends on your risk preflerence. Since the returns on Project B are more volatile, so a risk-averse investor would prefer Project A O B. Since the most likely return for both projects is the same, you can choose either project regardless of your risk preference. O C. Choose expansion B because it is less risky and thus a better investment O D. Choose expansion A because it has a higher optimistic rate of returm regardless of its risk. d. Assume that expansion B's most likely outcome is 21% per year and t an other facts remain the same. Does this change your answer to part c? (Select the best answer below) OA. No Click to select your answerls). 2 3 4 5 6 tab
