Jake is searching for a project for his company to invest in. He is interested in VR Headsets, Inc. He has been impressed with the product and believes VR Headsets is an innovative product. However, Jake realizes that any time you consider a project, risk is a major concern. The rule he follows is to only invest in projects with a coefficient of variation of returns below 0.90. Jake has obtained the following NPV information and associated probabilities for VR Headset, Inc. Calculate (1) the expectedNPV (2) the standard deviation ofNPV and (3) the coefficient variation. (4) Finally, should Jake invest in VR?

Scenario Probability NPV

Best Case 40% $40,000

Base Case 20% $11,000

Worst Case 40% -$8500

A.

1.15,900

2.21,855.69

3.0.88

4.YES

B.

1.14,800

2.21,772.92

3.1.47

4.NO

C.

1.14,900

2.21,855.69

3.0.79

4.YES

D.

1.16,800

2.21897

3.1.32

4.NO