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Macro-Micro Brew Pub is considering the purchase of one of two hops brew roasters less filling or tastes great. Both should provide a benefit over

Macro-Micro Brew Pub is considering the purchase of one of two hops brew roasters less filling or tastes great. Both should provide a benefit over a 10 year period and each requires an investment of $125,000. Looking at the following table which includes estimates of rates of return, probabilities for pessimistic, most likely and optimistic results.

Hopster A Less Filling

Hopster B Tastes Great

Investment

Amount

Probability

Amount

Probability

$125,000

1.00

$125,000

1.00

Rate of Return

Pessimistic

15%

.30

10%

.50

Likely

18%

.30

14%

.25

Optimistic

20%

.40

18%

.25

11) Range of rate of return

12) Expected Return?

13) Standard Deviation?

14) Best option?

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