Q3. A company is considering a 2-year project, project A, involving an initial investment of $600 and the following cash flows and probabilities:

Year 1		Year 2
Probability	Cash Flow	Probability	Cash Flow
0.1	$700	0.2	$600
0.4	600	0.3	500
0.4	500	0.3	400
0.1	400	0.2	300

1. Calculate the project expected NPV (net present value) and the standard deviation, assuming the discount rate to be 8%.
2. The company is also considering another 2-year project, project B, which has an expected NPV of $320 and a standard deviation of $125. Project A and B can not be implemented at the same time (mutually exclusive). Which of the two projects would you prefer? Explain?