Kyle's Shoe Stores Inc. is considering opening an additional suburban outlet. An aftertax expected cash flow of $130 per week isanticipated from two stores that are being evaluated. Both stores have positive net present values.Site AProbability Cash Flows0.20.1Site ASite B130190Coefficient ofVariationSite AO Site BSite BProbability Cash Flows0.1a. Compute the coefficient of variation for each site. (Do not round intermediate calculations. Round your answers to 3 decimalplaces.)0.30.20.2130160190b. Which store site would you select based on the distribution of these cash flows? Use the coefficient of variation as your measure ofrisk.<< PrevBARANSPOD beanin4 of 8Next >SACH********

The problem requires identifying coefficient of variation for the given alternatives. The…

Kyle's Shoe Stores Inc. is considering opening an additional suburban outlet. An aftertax expected cash flow of $130 per week is anticipated from two stores that are being evaluated. Both stores have positive net present values. Site A Probability Cash Flows 0.2 0.3 0.4 0.1 Site A Site B 80 130 140 190 Coefficient of Variation Site B Probability Cash Flows 0.1 50 a. Compute the coefficient of variation for each site. (Do not round intermediate calculations. Round your answers to 3 decimal places.) O Site A O Site B 0.2 0.3 0.2 0.2 80 130 160 190 b. Which store site would you select based on the distribution of these cash flows? Use the coefficient of variation as your measure of risk.

Kyle's Shoe Stores Inc. is considering opening an additional suburban outlet. An aftertax expected cash flow of $130 per week is anticipated from two stores that are being evaluated. Both stores have positive net present values. Site A Probability Cash Flows 0.2 0.3 0.4 0.1 Site A Site B 80 130 140 190 Coefficient of Variation Site B Probability Cash Flows 0.1 50 a. Compute the coefficient of variation for each site. (Do not round intermediate calculations. Round your answers to 3 decimal places.) O Site A O Site B 0.2 0.3 0.2 0.2 80 130 160 190 b. Which store site would you select based on the distribution of these cash flows? Use the coefficient of variation as your measure of risk.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 5PB

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