Please answer the two questions below with an explanation

Q1)

Q2)

Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to diversify its food business and lower its risks. It is examining three companies-a gourmet restaurant chain, a baby food company, and a nutritional products firm. Each of these companies can be bought at the same multiple of earnings. The following represents information about all the companies. Correlation with Treynor Pie Company + 1.0 Standard Deviation in Earnings ($ millions) Company Treynor Pie Company Gourmet restaurant Baby food company Nutritional products company Sales ($ millions) $ 158 66 56 79 Expected Earnings ($ millions) $ 8 6 4 5 $ 2.0 +0.5 + 6.4 1.2 1.9 3.5 - 0.6 a-1. Compute the coefficient of variation for each of the four companies. (Enter your answers in millions (e.g., $100,000 should be entered as "10"). Round your answers to 3 decimal places.) Coefficient of Variation Treynor Pie Company Gourmet restaurant Q1) Baby food company Nutritional products company a-2. Which company is the least risky? O Gourmet restaurant O Nutritional products company Treynor Pie Company O Baby food company a-3. Which company is the most risky? O Baby food company O Nutritional products company Treynor Pie Company O Gourmet restaurant b. Which of the acquisition candidates is most likely to reduce Treynor Pie Company's risk? O Gourmet restaurant O Baby food company O Nutritional products company Highland Mining and Minerals Co. is considering the purchase of two gold mines. Only one investment will be made. The Australian gold mine will cost $1,645,000 and will produce $309,000 per year in years 5 through 15 and $515,000 per year in years 16 through 25. The U.S. gold mine will cost $2,054,000 and will produce $252,000 per year for the next 25 years. The cost of capital is 9 percent. Use Appendix D for an approximate answer but calculate your final answers using the formula and financial calculator methods. (Note: In looking up present value factors for this problem, you need to work with the concept of a deferred annuity for the Australian mine. The returns in years 5 through 15 actually represent 11 years, the returns in years 16 through 25 represent 10 years.) a-1. Calculate the net present value for each project. (Do not round intermediate calculations and round your answers to 2 decimal places.) Net Present Value The Australian mine The U.S. mine Q2) a-2. Which investment should be made? O Australian mine O U.S. mine b-1. Assume the Australian mine justifies an extra 2 percent premium over the normal cost of capital because of its riskiness and relative uncertainty of cash flows. Calculate the new net present value given this assumption. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.) Net Present Value The Australian mine b-2. Does the new assumption change the investment decision? O yes