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The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each project has an initial outflow of $6,750 and has an expected life of

The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each project has an initial outflow of $6,750 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 6,750 0.6 6,750
0.2 7,250 0.2 18,000

BPC has decided to evaluate the riskier project at 12% and the less-risky project at 8%.

  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 $5,798 and its coefficient of variation (CVB) is 0.76. What are the values of (A) and (CVA)? 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: $
    CVA:

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