Suppose Encik Muhammad is considering three investments option for a period of one year. The outcomes are uncertain but three different states of economy have been ascertained. The relevant data are given as follow. State of Probability Investment's Return (RM) economy A B Recession 0.25 1,500 1,875 1,685 Normal 0.45 2,810 2,250 3,000 3,000 3,750 Вoom 0.30 3,375 Calculate the following for each project: i. Expected return ii. Variance iii. Standard deviation

Suppose Encik Muhammad is considering three investments option for a period of one year. The outcomes are uncertain but three different states of economy have been ascertained. The relevant data are given as follow. State of Probability Investment's Return (RM) economy A B Recession 0.25 1,500 1,875 1,685 Normal 0.45 2,810 2,250 3,000 3,000 3,750 Вoom 0.30 3,375 Calculate the following for each project: i. Expected return ii. Variance iii. Standard deviation

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 9PB: Joliet Company is considering two alternative investments. The company requires an 18% return from...

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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

Answer all the questions

Suppose Encik Muhammad is considering three investments option for a period of one year.
The outcomes are uncertain but three different states of economy have been ascertained. The
relevant data are given as follow.
State of
Probability
Investment's Return (RM)
economy
A
B
Recession
0.25
1,500
1,875
1,685
Normal
0.45
2,810
2,250
3,000
3,000
3,750
Вoom
0.30
3,375
Calculate the following for each project:
i.
Expected return
ii.
Variance
iii.
Standard deviation

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