You are considering three mutually exclusive projects with the following Projected Cash Flows Probabilities Project A Project B Project C uired $100,000 $30,000 $40,000 $50,000 $150,000 $40,000 $55,000 $67,000 $200,000 $50,000 $68,000 $70,000 1.00 0.35 ows for 5 years 0.45 0.20 a and variance of NPW distribution for each project using i ows are mutually independent. Which project has a higher probability of losing calculate probabilities for each alternative. (Hint: use normal approximation = 12%. Assume %3D
You are considering three mutually exclusive projects with the following Projected Cash Flows Probabilities Project A Project B Project C uired $100,000 $30,000 $40,000 $50,000 $150,000 $40,000 $55,000 $67,000 $200,000 $50,000 $68,000 $70,000 1.00 0.35 ows for 5 years 0.45 0.20 a and variance of NPW distribution for each project using i ows are mutually independent. Which project has a higher probability of losing calculate probabilities for each alternative. (Hint: use normal approximation = 12%. Assume %3D
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![Question 5.8
You are considering three mutually exclusive projects with the following
cash flows:
Projected Cash Flows
Probabilities Project A Project B Project C
$200,000
$50,000
$68,000
$70,000
Investment required
$100,000
$30,000
$40,000
$50,000
$150,000
$40,000
$55,000
$67,000
1.00
0.35
Annual cash flows for 5
уears
0.45
0.20
Compute the mean and variance of NPW distribution for each project using i = 12%. Assume
that project cash flows are mutually independent. Which project has a higher probability of losing
money? You must calculate probabilities for each alternative. (Hint: use normal approximation)
A) Project A
B) Project B
C) Project C
D) Answers A, B and C are not correct](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff8f6f70b-e7a3-4b54-8cc5-6648a4d86850%2Fe544b3f3-7046-453d-8add-5225597e612d%2Fjml5ylt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 5.8
You are considering three mutually exclusive projects with the following
cash flows:
Projected Cash Flows
Probabilities Project A Project B Project C
$200,000
$50,000
$68,000
$70,000
Investment required
$100,000
$30,000
$40,000
$50,000
$150,000
$40,000
$55,000
$67,000
1.00
0.35
Annual cash flows for 5
уears
0.45
0.20
Compute the mean and variance of NPW distribution for each project using i = 12%. Assume
that project cash flows are mutually independent. Which project has a higher probability of losing
money? You must calculate probabilities for each alternative. (Hint: use normal approximation)
A) Project A
B) Project B
C) Project C
D) Answers A, B and C are not correct
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