Mountain Ski Corp. was ready to take large risks and is eager to take greatest risk possible. Lakeway Train Co. is more typical of average corporation and is risk - averse.
a. which of the given four projects must Mountain Ski Corp. select? Calculate coefficients of variation to aid you make your decision.
b. Which one of four projects must Lakeway Train Co. select based on same criteria of using coefficient of variation?
Year Returns Expected Value Standard Deviation
A $527,000 $834,000
B 682,000 306,000
C 74,000 135,000