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Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow of $160 per week is anticipated from two
Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow of $160 per week is anticipated from two stores that are being evaluated. Both stores have positive net present values. Probability 0.2 0.2 0.3 0.3 Site A Site A Site B Cash Flows $70 160 170 210 Probability 0.1 0.2 0.2 0.4 0.1 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 Cash Flows $ 50 80 160 210 230 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.
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