Two mutually exclusive investment projects are under consideration. It is assumed that the cash flows are statistically independent random variables with means and variances estimated as given in Table PI2.24.
TABLE PI2.24

(a) For each project, determine the mean and standard deviation of the NPW, using an interest rate of 15%.
(b) On the basis of the results of part (a), which project would you recommend?

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Project A Project B End of Year Mean Variance Mean Variance 0 $5,000 1,000 $10.000 2,000 4,000 1,000 6,000 1,500 2,000 4,000 1,500 8,000