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The Bartram-Pulley Company (BPC) must decide between two mutually exclusive investment projects. Each project costs $6,750 and has an expected life of 3 years. Annual
The Bartram-Pulley Company (BPC) must decide between two mutually exclusive investment projects. Each project costs $6,750 and has an expected life of 3 years. Annual cash flows from each project begin 1 year after the initial investment is made and have the following probability distributions: BPC has decided to evaluate the riskier project at an 11% rate and the less risky project at a 9% rate. a. What are the expected values of the annual cash flows from each project? Do not round intermediate calculations. Round your answers to the nearest dollar. Expected annua What is the coefficient of variation (CV) for each project? Do not round intermediate calculations. Round your answers to two decimal places. Coe b. What is the risk-adjusted NPV of each project? Do not round intermediate calculations. Round your answers to the nearest cent. Risk-adjusted NPV c. If it were known that Project B is negatively correlated with other cash flows of the firm whereas Project A is positively correlated, how would this affect the decision? This would tend to reinforce the decision to Project If Project B's cash flows were negatively correlated with gross domestic product (GDP), would that influence your assessment of its risk
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