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.
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 1PB: A bookstore is planning to purchase an automated inventory/remote marketing system, which includes...
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