Fhe projects coefficient of variation cv of

Assignment Help Finance Basics
Reference no: EM13476808

Consider the following probability distribution of returns estimated for a proposed project that involves a new ultrasound machine:

State of EconomyProbability of Occurrence Rate of Return


Very Poor

0.10

-10.0%


Poor

0.200.0%


Average

0.40

10.0%


Good

0.2020.0%


Very Good

0.10

30.0%


  1. What is the expected rate of return on the project?
  2. What is the project's standard deviation of returns?
  3. What is the project's coefficient of variation (CV) of returns?
  4. What type of risk does the standard deviation and CV measure?
  5. In what situation is the risk relevant?

Reference no: EM13476808

Questions Cloud

Find the firms cost of equity estimate according to dcf : golden state home health inc. is a large california-based for-profit home health agency. its dividends are expected to
Suppose that twin oaks four year bond had seminannual : twin oaks health center has a bond issue outstanding with a coupon rate of 7 percent and four years remaining until
Research the three types of bankruptcy and answer the : research the three types of bankruptcy and answer the following questionsbullwhat are some of the reasons that people
Find the future year 5 value of cash flow stream if the : consider another uneven ash flow
Fhe projects coefficient of variation cv of : consider the following probability distribution of returns estimated for a proposed project that involves a new
Is there a relationship between the 2 measurements for the : baseball stadiums vary in age style size and in many other ways. fans might think of the size of the stadium in terms
Females are estimated to account for what percentage of : 1 the best approach to stress is toa manage or limit it.b just deal with it.c dont increase it.d eliminate it.2
An american business requires to pay a 15000 canadian : selling quotes for foreign currencies in new
Utilizing the concepts and theories discussed in course : utilizing the concepts and theories discussed in the course business management identify a problem in your current

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the degree of operating leverage at the accounting

A four year project costs $1.7 million and has straight-line depreciation. Sales of 190 units per year are projected, with a unit sales price of $18,000. Variable costs per unit are $11,200, and fixed costs are $410,000 per year. The required retu..

  Which is invested in short-term investments

Rihana is a financial analyst in Bidget Corp. As part of her analysis of the annual distribution policy and its impact on the firm's value, she makes the following calculations and observations.

  If quick towing is in 34 percent marginal tax bracket find

suppose the quick towing company purchases a new tow truck. the old truck had a book value of 1000 and was sold for

  Calculate the percentage total return of the stock

A stock with an initial price of $55 per share paid a dividend of $1.75 per share throughout the year, with an ending price of $59. Calculate the percentage total return of the stock.

  What is the equity multiplier

Rainbow Company has a debt-equity ration of 1.25. Return on assets is 7.5%, and total equity is $625,000. What is the equity multiplier? Return on equity? Net Income?

  Calculate johnson debt ratio

Calculate Johnson's debt ratio assuming the firm uses only debt and common equity. Round your answer to two decimal places.

  Compute return on proposed 20000 investment and indicate

richard e-mailed that he and monica differed about the impact of his extra spending over the past 15 years. he

  Does the concept of revenue less expense equaling an

does the concept of revenue less expense equaling an increase in equity or fund balance make sensenbsp to you? if not

  Determination of risky stock

Common stock A has an expected return of 10%, a standard deviation of future returns of 25%, and a beta of 1.25. Common stock B has an expected return of 12 percent, a standard deviation of future returns of 15 percent,

  Define the capital market line

Expalin what similarities are observed and What conclusions can be drawn and define the capital Market Line

  Comparing machines with unequal lives

Vandalay Industries is considering the purchase of a new machine for the production of latex. If the company plans to replace the machine when it wears out on a perpetual basis, the EAC for machine A is $ and the EAC for machine B is $ . Therefore..

  Estimate the value of common stock

The Corporation had declining sales and rising expenses over the last decade and expects this trend to continue. As a result, company predicts that earnings and dividends will decline indefinitely at a rate of 4 percent per year.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd