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Question 6 The following shows the information of 2 projects, i.e. A and B, which make available to Sport plc. State of Probability Of
Question 6 The following shows the information of 2 projects, i.e. A and B, which make available to Sport plc. State of Probability Of Cash flow for project A, RM Cash flow for project B, RM economy outcome Strong Normal Weak 0.2 700,000 400,000 200,000 550,000 400,000 300,000 0.5 0.3 a) To assist the management to evaluate the risk status of these 2 projects, you are required to compute, for EACH of the project: i. Expected return; ii. Standard deviation; and iii. Coefficient of variation (CV). (4 marks) (11 marks) (3 marks) b) Based on the above results and, knowing the management and shareholders of Sport plc are risk averse, suggest which project the company should undertake. Why? (2 marks)
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Introduction to Management Science
Authors: Bernard W. Taylor
11th Edition
132751917, 978-0132751919
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