The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each costs $7,000 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		Project B
Probability	Cash Flows		Probability	Cash Flows
0.2	$6,250		0.2	$0
0.6	$7,000		0.6	$7,000
0.2	$7,750		0.2	$18,000

BPC has decided to evaluate the riskier project at 11% and the less-risky project at 10%.

1. What is each project's expected annual cash flow? Round your answers to the nearest cent. Project A: $ Project B: $ Project B's standard deviation (_B) is $5,776 and its coefficient of variation (CV_B) is 0.74. What are the values of (_A) and (CV_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: $ CV_A:
2. Based on their risk-adjusted NPVs, which project should BPC choose? -Select-Project AProject BItem 5
3. If you knew that Project B's cash flows were negatively correlated with the firm's other cash flow, whereas Project A's flows were positively correlated, how might this affect the decision? -Select-This would make Project B more appealing.This would make Project B less appealing.Item 6 If Project B's cash flows were negatively correlated with gross domestic product (GDP), while A's flows were positively correlated, would that influence your risk assessment? -Select-This would make Project B more appealing.This would make Project B less appealing.Item 7