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Xylox Corporation needs to estimate the investment in operating capital for year 2 associated with a new project. The incremental free cash flows for the

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Xylox Corporation needs to estimate the investment in operating capital for year 2 associated with a new project. The incremental free cash flows for the project are: Yr O=-20,000; Yr 1=5,000; Yr 2=7,000; Yr 3=10,000. The Operating Cash Flows are: Yr O=0; Yr 1=8,000; Yr 2=10,000; Yr 3=15,000. What is xylox Corporation's investment in operating capital in year 2? -2000 0 2000 3000 Which company offers the best risk-reward tradeoff? Company A has coefficient of variation of 1.2. Company B has coefficient of variation of 1.5. Company C has a coefficient of variation of 1.8. Finally, Company D has a standard deviation of 14% and an average return of 12%. Company A Company B Company Company D

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