Question: Swift Manufacturing must choose between two asset purchases. The annual rate of return and the related probabilities given in the following table summarize the firm's
Swift Manufacturing must choose between two asset purchases. The annual rate of return and the related probabilities given in the following table summarize the firm's analysis to this point.
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a. For each project, compute:
(1) The range of possible rates of return.
(2) The expected return.
(3) The standard deviation of the returns.
(4) The coefficient of variation of the returns.
b. Construct a bar chart of each distribution of rates of return.
c. Which project would you consider less risky?Why?
Project 257 Project 432 Ratc of return Probability Ratc of return bability Rate of rcturn -10% 10 20 30 40 45 50 60 70 80 100 0.01 0.04 0.05 0.10 0.15 0.30 0.15 0.10 0.05 0.04 0.01 10% 15 20 25 30 35 40 45 50 0.05 0.10 0.10 0.15 0.20 0.15 0.10 0.10 0.05
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a Project 257 Project 432 1 Range 050 010 040 b Bar Charts c Summary stati... View full answer
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