Question
Kanone, Inc., is considering the purchase of one of two microfilm cameras, R and S. Both should provide benefits over a 10-year period, and each
Kanone, Inc., is considering the purchase of one of two microfilm cameras, R and S. Both should provide benefits over a 10-year period, and each requires an initial investment of $4,000. Management has constructed the following table of estimates of rates of return and probabilities for pessimistic, most likely, and optimistic results: ps4-4.jpg What is the range for the rate of return for camera R? (Round to the nearest whole number, and do not include the '%' sign in your response). What is the range for the rate of return for camera S? (Round to the nearest whole number, and do not include the '%' sign in your response). What is the value of the expected return for camera R? (Round to two decimal places, and do not include the '%' sign in your response). What is the value of the expected return for camera S? (Round to two decimal places, and do not include the '%' sign in your response).
Camera R Amount Probability $4,000 1.00 Camera S Amount Probability $4,000 1.00 Initial investment Annual rate of return Pessimistic Most likely Optimistic 17% 28% 34% 0.21 0.54 0.25 23% 29% 30% 0.18 0.59 0.23Step by Step Solution
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