Two investment alternatives are being considered the data

Question

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)].