Response to the following problem:
Consider the probability distribution of the first year cash flows for the DEF Project:
|
Possible Cash Flow
|
Probability
|
|
$1,000
|
10%
|
|
$2,000
|
60%
|
|
$3,000
|
30%
|
a. Calculate the range of possible cash flows.
b. Calculate the expected cash flow.
c. Calculate the standard deviation of the possible cash flows.
d. Calculate the coefficient of variation of the possible cash flows.