Determine the mean and standard deviation of incremental pw

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Reference no: EM131507264

Question: Two investment alternatives are being considered. The data below have been estimated by a panel of experts, and all cash flows are assumed to be independent. Life is not a variable.

Alternative A Alternative B
Std. Std.

                      Expected          Deviation Expected Deviation
End of            Cash               of Cash                   Cash    of Cash
Year    Flow Flow    Flow    Flow

0 -$8,000 $0 -$12,000 $500

1 4,000 600 4,500 300

2 6,000 600 4,500 300

3 4,000 800 4,500 300

4 6,000 800 4,500 300

With MARR = 15% per year, determine the mean and standard deviation of the incremental PW [i.e., ?(B - A)].

Reference no: EM131507264

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