Kyle's Shoe Stores Inc. is considering opening an additional suburban outlet. An aftertax expected cash flow...

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Kyles Shoe Stores Inc. is considering opening an additional suburban outlet. An aftertax expected cash flow of $180 per week

business finance

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Answer 1

Answer #1

Coefficient of Variation=Standard Deviation/Expected Value

1.
=Sqrt(0.2*(90-180)^2+0.4*(180-180)^2+0.2*(190-180)^2+0.2*(260-180)^2)/180=0.300205690802362

2.
=Sqrt(0.1*(50-180)^2+0.3*(90-180)^2+0.1*(180-180)^2+0.3*(240-180)^2+0.2*(290-180)^2)/180=0.484958952062115

3.
Select Site A as it has lower coefficient of variation and hence less risky

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Answer 2

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