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Mary Beth Clothes is considering opening an additional suburban outlet. An aftertax cash flow of $110 per day (expected value) is projected for each of
Mary Beth Clothes is considering opening an additional suburban outlet. An aftertax cash flow of $110 per day (expected value) is projected for each of the two locations being evaluated. Site A Probability Cash Flows 0.10 $60 0.30 110 0.30 120 0.20 175 Site B Probability Cash Flows 0.10 $30 0.20 60 0.40 110 0.20 160 0.10 190 Expected value $110 Expected value $110 a. Compute the coefficient of variation for each site. (Do not round intermediate calculations. Round the final answers to 4 decimal places.) Coefficient of variation Site A Site B b. Which of these sites would you select based on the distribution of these cash flows? Site A Site B
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