Friday, 22 May 2015

Mountain Ski Corp. was set up to take large risks and is willing to take the greatest risk possible. Lakeway Train Co. is more typical of the average corporation and is risk-averse.

Mountain Ski Corp. was set up to take large risks and is willing to take the greatest risk possible. Lakeway Train Co. is more typical of the average corporation and is risk-averse.

ProjectsReturns:
Expected Value
Standard  
Deviation  
A$294,000 $197,000 
B 767,000  430,000 
C 185,000  137,000 
D 155,000  252,000 


a-1.Compute the coefficients of variation. (Round your answers to 3 decimal places.)

 Coefficient of
Variation
  Project A
  Project B
  Project C      
  Project D  


a-2.Which projects should Mountain Ski Corp. choose?
  
 Project D
 
b.  
Which one of the four projects should Lakeway Train Co. choose based on the same criteria of using the coefficient of variation?
  Project B

 
Explanation: