The firm has a 75 chance if it invests -1500 a return of


The firm has a 75% chance if it invests -$1,500 a return of $500 for 7-years, and a 25% chance of returning $25 for 7-years. Calculate the effect of waiting on the project's risk, using the same data. By how much will delaying reduce the project's coefficient of variation? (Hint: Use the expected NPV.)

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Financial Management: The firm has a 75 chance if it invests -1500 a return of
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