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The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each project has an initial after-tax cash outflow of $6,500 and has an expected
The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each project has an initial after-tax cash outflow of $6,500 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 Probability Cash Flows Probability Cash Flows 0.2 $5,750 0.2 0 06 6,500 0.6 6,500 0.2 7,250 0.2 17.000 BPC has decided to evaluate the riskier project at 11% and the less risky project at 9% What is each project's expected annual after-tax cath now? Round your answers to the nearest cent Project A Project : Project B's standard deviation () is $5,464 and its coefficient of variation (CV) is 0.75. What are the values of A and CV. Do not round intermediate calculations Round your answer for Mandard deviation to the nearest cent and for coefficient of variation to two decimal places OA CV b. Based on the adjusted NPVS, which project should BPC choose? Select
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