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Mr. John Backster, a retired executive, desires to Invest a portion of his assets In rental property. He has narrowed his choices to two apartment
Mr. John Backster, a retired executive, desires to Invest a portion of his assets In rental property. He has narrowed his choices to two apartment complexes. Windy Acres and Hillcrest Apartments. The anticipated annual cash inflows from each are as follows: Windy Acres Hillcrest Apartments Yearly Aftertax Cash Yearly Aftertax Cash Inflow Probability Inflow Probability $110,000 0.2 $115, see 0.2 115,000 0.2 128, eee 2.3 130,00 0.2 130,000 145,000 2.2 148,eee 0.1 150,00 0.2 a. Find the expected value of the cash flow for each apartment complex. (Enter the answers in thousands.) Windy Acres Hillcrest Apartments Expected cash flow $ $ b. What is the coefficient of variation for each apartment complex? (Do not round Intermediate calculations. Round the final answers to 4 decimal places.) Coefficient of variation Windy Acres Hillcrest Apartments c. Which apartment complex has more risk? O Windy Acres Hillcrest Apartments
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