The Butler$-$Perkins Company $($BPC$)$ must decide between two mutually exclusive projects. Each project has an initial after$-$tax cash outflow of $$7,000$ and has an expected life of $3$ years.

Annual project after$-$tax cash flows begin $1$ year after the initial investment and are subject to the following probability distributions:

Project A

Project B

BPC has decided to evaluate the riskier project at $12\%$ and the less$-$risky project at $9\%.$

a$.$ What is each project's expected annual after$-$tax cash flow? Round your answers to the nearest cent.

Project A: $

Project B: $

Project B$\text{'}$s standard deviation $(\{$:${}_B)$ is $$6,132$ and its coefficient of variation $(C{V}_B)$ is $0\mathrm{.}77.$ What are the values of ${}_A$ and $C{V}_A?$ Do not round intermediate calculations. Round

your answer for standard deviation to the nearest cent and for coefficient of variation to two decimal places.

${}_A$

$C{V}_A$ :

b$.$ Based on the risk$-$adjusted NPVs$,$ which project should BPC choose?

c$.$ If you knew that Project B$\text{'}$s cash flows were negatively correlated with the firm's other cash flows, but Project A$\text{'}$s cash flows were positively correlated, how might this affect the

darisinn?

If Project B$\text{'}$s cash flows were negatively correlated with gross domestic product $($GDP$),$ while A$\text{'}$s cash flows were positively correlated, would that influence your risk