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Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow of $120 per week is anticipated from two stores
Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow of $120 per week is anticipated from two stores that are being evaluated. Both stores have positive net present values. Probability 0.2 0.3 0.3 0.2 Site A Site B Site A Cash Flows $70 120 130 155 O Site A Probability 0.1 0.3 0.1 0.3 0.2 a. Compute the coefficient of variation for each site. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. Coefficient of Variation Site B O Cash Flows $30 60 120 150 210 Check my b. Which store site would you select based on the distribution of these cash flows? Use the coefficient of variation as your measure of risk. Activate Window
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