Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow of $100 perweek is anticipated from two stores that are being evaluated. Both stores have positive net present values.Probability0.20.20.20.4Site ASite BSite ACash FlowsO Site AO Site B$50100110120Coefficient ofVariationProbability0.10.20.20.20.3a. Compute the coefficient of variation for each site.Note: Do not round intermediate calculations. Round your answers to 3 decimal places.Site BCash Flows$2050100150190b. Which store site would you select based on the distribution of these cash flows? Use the coefficient of variation as your measure ofrisk.

Coefficient of Variation= Standard deviation / aftertax expected cash flow Standard deviation=…

Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow of $100 per week is anticipated from two stores that are being evaluated. Both stores have positive net present values. MENGAN MENGANTAREATION AU Site A Probability 0.2 0.2 0.2 0.4 Cash Flows Site A Site B Coefficient of Variation RE Probability 0.1 $ 50 100 110 120 0.2 0.2 0.2 0.3 a. Compute the coefficient of variation for each site. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. Site B Cash Flows $20 50 100 150 190

Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow of $100 per week is anticipated from two stores that are being evaluated. Both stores have positive net present values. MENGAN MENGANTAREATION AU Site A Probability 0.2 0.2 0.2 0.4 Cash Flows Site A Site B Coefficient of Variation RE Probability 0.1 $ 50 100 110 120 0.2 0.2 0.2 0.3 a. Compute the coefficient of variation for each site. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. Site B Cash Flows $20 50 100 150 190

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 1PB: A bookstore is planning to purchase an automated inventory/remote marketing system, which includes...

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Karamo's Shoe Stores Incorporated is considering opening an additional suburban outlet. An aftertax expected cash flow of $100 per week is anticipated from two stores that are being evaluated. Both stores have positive net present values. Site A Probability 0.2 0.2 0.2 0.4 Site A Site B Cash Flows $50 100 110 120 Coefficient of Variation Site B Probability 0.1 0.2 0.2 0.2 0.3 a. Compute the coefficient of variation for each site. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. Cash Flows: $ 20 50 100 150 190
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