Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow of $120 perweek is anticipated from two stores that are being evaluated. Both stores have positive net present values.Probability0.20.29.40.2Site ASite BSite ACash Flows$ 70Site ASite B120130150Coefficient ofVariationProbability0.10.29.20.40.1Site Ba. Compute the coefficient of variation for each site.Note: Do not round intermediate calculations. Round your answers to 3 decimal places.Cash Flows$ 4079120140220b. Which store site would you select based on the distribution of these cash flows? Use the coefficient of variation as your measure ofrisk.

The value that is derived by the division of the expected standard deviation value and the expected…

Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow of $120 per week is anticipated from two stores that are being evaluated. Both stores have positive net present values. Probability 9.2 9.4 0.2 Site A Site B Site A Cash Flows $ 70 120 130 158 Site A O Site B Probebility 0.1. Coefficient of Variation 0.2 0.2 0.4 0.1 a. Compute the coefficient of variation for each site. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. site 8 Cash Flows 5:40 70 129 140 220 b. Which store site would you select based on the distribution of these cash flows? Use the coefficient of variation as your measure of risk.

Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow of $120 per week is anticipated from two stores that are being evaluated. Both stores have positive net present values. Probability 9.2 9.4 0.2 Site A Site B Site A Cash Flows $ 70 120 130 158 Site A O Site B Probebility 0.1. Coefficient of Variation 0.2 0.2 0.4 0.1 a. Compute the coefficient of variation for each site. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. site 8 Cash Flows 5:40 70 129 140 220 b. Which store site would you select based on the distribution of these cash flows? Use the coefficient of variation as your measure of risk.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A factory costs $350, 000. You forecast that it will produce cash inflows of $80, 000 in year 1, $ 140, 000 in year 2, and $220, 000 in year 3. The discount rate is 12%. a. Calcule the PV of cash inflows. (Do not round intermediate calculations. Rounds your answer to 2 decimal places.) b. Is the factory a good investment?
Please give me answer very fast in 5 min saur
Allison's Dresswear Manufacturers is preparing a strategy for the fall season. One alternative is to expand its traditional ensemble of wool sweaters. A second option would be to enter the cashmere sweater market with a new line of high-quality designer label products. The marketing department has determined that the wool and cashmere sweater lines offer the following probability of outcomes and related cash flows. Expand Wool Sweaters Line Expected Sales Probability Fantastic Moderate Low 0.2 Present Value of Cash Flows from Sales $226,000 184,000 93,300 Expand wool sweaters line Enter cashmere sweaters line Enter Cashmere Sweaters Line Probability 0.3 0.3 0.4 The initial cost to expand the wool sweater line is $155,000. To enter the cashmere sweater line, the initial cost in designs, inventory, and equipment is $173,000. Net Present Value Present Value of Cash Flows from Sales $366,000 327,000 a. Calculate net present value if, Allison's Dresswear Manufacturers decides to: (Negative…
Refer to the data provided in Table 11.3 below to answer the following question(s). Table 11.3 Project New computer for sales staff Remodel for distribution center On-site day care center Employee fitness center Total Investment (dollars) $250,000 $200,000 $100,000 $50,000 Expected Rate of Return (percentage) 11 9 5 4 Refer to Table 11.3. If the interest rate is 2.5%, Blackstar Drone Manufacturing should O not fund any of the projects. fund all of the projects. fund all of the projects except for the employee fitness center. O fund only the employee fitness center.
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Harry is trying to evaluate a two year project using NPV. There is uncertainty as to the level of sales (in units) in each of the two years: Year 1 Sales units Probability Year 2 Sales units Probability 10,000 0.3 8,000 0.2 10,000 0.8 15,000 0.7 20,000 0.6 10,000 0.4 Required: (a) On what expected level of sales in Year 1 and 2 should Harry base his NPV calculation? (b) Imagine that the project outlay is £230,000 and each unit sold has a contribution of £10. If Harry’s cost of capital is 10%, what is the project’s…
Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow of $160 per week is anticipated from two stores that are being evaluated. Both stores have positive net present values. Probability 0.2 0.2 0.3 0.3 Site A Site B Site A Cash Site A O Site B FlowS $ 70 160 170 210 Probability 0.1 0.2 0.2 0.4 0.1 a. Compute the coefficient of variation for each site. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. Site B Coefficient of Variation Cash FlowS $ 50 80 160 210 230 b. Which store site would you select based on the distribution of these cash flows? Use the coefficient of variation as your measure of risk.
Management of Sandhill Mints, a confectioner, is considering purchasing a new jelly bean-making machine at a cost of $312,500. They project that the cash flows from this investment will be $113,000 for the next seven years. If the appropriate discount rate is 14 percent, what is the NPV for the project? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.) NPV=

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