You recently receved an offer of appointment as am a alyst with francis finance coporationn this company specializes in investing in rental.properties within the greater tronoto francis corporation uses $10\%$ its cost of capital. francis corporatoon has recently biwedd a large investment from johnjoness a tetired executive who deserve to invrat portion of jis asstt rental property he has narrowed choice of two apartments complexes miasissauga manors each brampto acres you have been asked to anyst both incestment optiond snf $.$ajr recommended o john jones the onvest will be gor $10$ yearseachh apsrtment cost $1\mathrm{.}5$ millionat the ten endtenn years aoartment canbr sold $150\%$ og ita otiginal cost tht

within the Creater Toronto Area Francis corporation TOP

retired executive who desires to invest portion of te wecats in

Brampton Acres. You have been asked to analyse both investma

apartment will cost $$1\mathrm{.}5$ million. At the end of the ten year the apartments can be out for so

apartment are as follows:

oprions and

Mississauga Manors

Brampton Acres

Initial Investments

$10$

Cost of Capital

$1,500,000$

$10\mathrm{.}00\%$

$25$

Salvage Percentage

Number of Years

$150\mathrm{.}00\%$

$10$

Initial Investments

Cost of Capital

Salvage Percentage

Number of Years

$1,500,000$

$10\mathrm{.}009$

$150\mathrm{.}00\%$

$10$

$18$

Yearly aftertax cash inflow

Probability

Yearly aftertax cash inflow

Probability

$24$

$15$

$$90,000$

$0\mathrm{.}1$

$95,000\mathrm{.}00$

$0\mathrm{.}20$

$16$

$95,000$

$0\mathrm{.}2$

$102,000\mathrm{.}00$

$0\mathrm{.}30$

$17$

$98,000$

$0\mathrm{.}4$

$105,000\mathrm{.}00$

$0\mathrm{.}40$

$18$

$100,000$

$0\mathrm{.}2$

$120,000\mathrm{.}00$

$0\mathrm{.}10$

$9$

$105,000$

$0\mathrm{.}1$

Find the expected value of the cash flow for each apartment complex.

What is the coefficient of variation for each apartment complex?

Which apartment complex has more risk?

a$.$

b$.$

C$.$

What is the NPV of both investments

d$.$

e$.$

Which investment will you recommend for John Jones to accept

wows from each