Question
21)Five investment alternatives have the following returns and standard deviations of returns. AlternativesReturns:
Expected ValueStandard
DeviationA $ 1,820 $ 550 B 860 1,030 C 5,900 1,200 D 1,980 540 E 61,000 22,100
Calculate the coefficient of variation and rank the five alternatives from lowest risk to the highest risk by using the coefficient of variation. (Round your answers to 3 decimal places.) AlternativesCoefficient of
VariationRankA(Click to select)CDAEBB(Click to select)CDAEBC(Click to select)CDAEBD(Click to select)CDAEBE(Click to select)CDAEB
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Question
22) Assume you are risk-averse and have the following three choices.
Expected
ValueStandard
DeviationA$2,780 $1,880 B 2,660 1,320 C 1,910 1,010 a.Compute the coefficient of variation for each. (Round your answers to 3 decimal places.) ProjectsCoefficient of VariationA B C b.Which project will you select? Project CProject AProject B
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Question
23) Waste Industries is evaluating a $59,100 project with the following cash flows. YearsCash Flows1$9,180 2 13,100 3 21,700 4 19,400 5 25,600 The coefficient of variation for the project is .654.
Coefficient of VariationDiscount Rate0−.25 4%.26−.50 7%.51−.75 10%.76−1.00 12%1.01− 1.25 18% Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.
a.Select the appropriate discount rate. 4%7%18%10%12%
b.Compute the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.) Net present value$
c. Based on the net present value should the project be undertaken? NoYes
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Question
I know the wrong answer is geocentric approach
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