Determine the coefficient of variation for the following annual cash in flows from an investment project:
$\text { Cash Flow }$
$$\begin{array} { c c }
\text { (E20) F0\% } & \text { Prabability } \
\hline 2,000 & .10 \
2,500 & .20 \
3,000 & .30 \
3,500 & .20 \
4,000 & .20
\end{array}$$
A)$624.50
B)125.8
C)0.201
D)cannot be determined

Question

Determine the coefficient of variation for the following annual cash in flows from an investment project:
$\text { Cash Flow }$
$$\begin{array} { c c } 
\text { (E20) F0\% } & \text { Prabability } \
\hline 2,000 & .10 \
2,500 & .20 \
3,000 & .30 \
3,500 & .20 \
4,000 & .20
\end{array}$$
A)$624.50
B)125.8
C)0.201
D)cannot be determined

Quizplus · Accepted Answer

R = $2,000(0.10) + $2,500(0.20) + $3,000(0.30) + $3,500(0.20) + $4,000(0.20) = $3,100
σ = [(2000 - 3100)²(.10) + (2500 - 3100)²(.20) + (3000 - 3100)²(.30) + (3500 - 3100)²(.20) + (4000 - 3100)(.20)].⁵
= (390,000).⁵ = $624.50
v = $624.50/$3100 = 0.201

Determine the Coefficient of Variation for the Following Annual Cash Cash Flow \text { Cash Flow } Cash Flow

Determine the Coefficient of Variation for the Following Annual Cash $\text { Cash Flow }$