Question
The Oklahoma Pipeline Company projects the following pattern of inflows from an investment. The inflows are spread over time to reflect delayed benefits. Each year
The Oklahoma Pipeline Company projects the following pattern of inflows from an investment. The inflows are spread over time to reflect delayed benefits. Each year is independent of the others.
| Year 1 | Year 5 | Year 10 | |||||||||||||||||
| Cash Inflow | Probability | Cash Inflow | Probability | Cash Inflow | Probability | ||||||||||||||
| $ | 65 | 0.20 | $ | 50 | 0.25 | $ | 40 | 0.30 | |||||||||||
| 80 | 0.60 | 80 | 0.50 | 80 | 0.40 | ||||||||||||||
| 95 | 0.20 | 110 | 0.25 | 120 | 0.30 | ||||||||||||||
The expected value for all three years is $80. Compute the standard deviation for each of the three years. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
| standard deviation | |
| year 1 | |
| year 5 | |
| year 10 |
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen, Peter Brewer
17th Edition
1260247783, 978-1260247787
