27. An investment proposal had the following discrete probability distributions of expected cash flows:

Give

(a) the expected return each year and net present worth of the total expected return,

(b) standard deviation of the expected returns in each year; and also standard deviation of present value of expected returns. (Discount rate= 10%).

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Year 1 Year 2 Year 3 State (j) Return Prob. Return Prob. Return Prob. 123 + 50 0.10 20 0.10 -40 0.10 60 0.20 40 0.25 30 0.30 70 0.40 60 0.30 50 0.30 4 80 0.20 80 0.25 80 0.20 5 10 90 0.10 100 0.10 140 0.10