1. Consider two projects: Project A Project B PP 2.2 years 2.8 years...

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Accounting

1. Consider two projects:

Project A Project B

  • PP 2.2 years 2.8 years
  • IRR 12.5% 18.3%
  • NPV -$15,500 $16,900

Assume that the projects both have a required return of 14% and a critical acceptance level (T) of 2.6 years. If these are independent projects we should

2.

Consider the following probability distribution

  • Probability Return
  • 0.10 -100%
  • 0.20 -10%
  • 0.50 20%
  • 0.20 100%

Calculate the standard deviation for this security.

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