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 Probability Cash Flows 0.2 $6,250 0.6 $6,500 0.2 $6,750 Project B Probability Cash Flows 0.2 $0 0.6 $6,500 0.2 $18,000 BPC has decided to evaluate the riskier project at 13% and the less-risky project at 9%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. What is each project's expected annual cash flow? Round your answers to two decimal places, Project A: 5 Project B: $ Project B's standard deviation ( ) is 55,822.37 and its coefficient of variation (CV) is 0.78. What are the values of (c) and (CVJ? Round your answers to two decimal places. CA=5 CVA b. Based on the risk adjusted NPVs, which project should BPC choose? c. If you knew that Project B's cash flows were negatively correlated with the firm's other cash flow, but Project A's cash flows were positively correlated, how might this affect the decision? If Project B's cash flows were negatively correlated with gross comestic product (GP), while As cash flows were positively correlated would that influence your risk assessment Format Painter Project risk analysis WN $6,500.00 Costs, Projects A and B Expected life of projects in years) Difference between Project A CFS $250.00 TO Probability 0.2 Cash Flows $8.250.00 $6,500.00 $6.750.00 0.2 Probabil 02 0.6 0.2 Cash Flows $0.00 $6,500.00 $18,000.00 Discount rate, risky project Discount rate, less risky project 13.00% 9.00% Formulas 22. Calculation of Expected CF, SD and CV: 23 Project A 24 Expected annual cash flow 15 Standard deviation (SD) Coeficient of variation (CV) ENA Project B Expected annual cash flow Standard deviation (SD) Coeficient of variation (CV) $0.404.74 DIVO Which project is riskier? Project A risk-adjusted discount rate Project Brisk-adjusted discount rate Calculation of Risk-Adjusted NPVS: Which project should be chosen