Computing the expected rate of return of copier

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Reference no: EM13973093

The College Copy Shop is in process of purchasing a high-tech copier. In their search, they have gathered the following information about two possible copiers A and B.

 

A

B

Initial Investment

$10,000

$10,000

Annual rate of return

 

 

 

Return(%)

Prob.

Return(%)

Prob.

Pessimistic

11

0.30

9

0.30

Most Likely

18

0.45

18

0.45

Optimistic

22

0.25

25

0.25

a. Compute expected rate of return for each copier.

b. Compute variance and standard deviation of rate of return of each copier.

c. Which copier should they purchase?

Reference no: EM13973093

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