Project Risk Analysis

Project risk analysis The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each costs $6,500 and has an expected life of 3 years. Annual project cash flows begin 1 year after the initial investment and are subject to the following probability distributions: Project A Project B Probability Cash Flows Probability Cash Flows 0.2 $6,250 0.2 $0 $6,500 0.6 0.6 $6,500 $18,000 $6,750 0.2 0.2 BPC has decided to evaluate the riskier project at 11% and the less-risky project at 9%. a. What is each project's expected annual cash flow? Round your answers to two decimal places. Project A. Project B. Project B's standard deviation (oB) is $5,822 and its coefficient of variation (CVB) is 0.78. What are the values of (aA) and (CVA)? Round your answer to two decimal places. CVA