Calculate the range of each expansion proposal

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Solar Designs is considering an investment in expanding a product line. Two types of expansion are considered. After investigating the possible outcomes, the company made the estimates listed in the following table:

                                  Probability              Expansion A              Expansion B
Initial Investment                                 $ 12,000                   $ 12,000
Annual Rate of Return
Pessimistic            .25                             16%                        10%
Most Likely          .50                              20%                         20%
Optimistic            .25                              24%                        30%

Problem a) Calculate the range of each expansion proposal.

Problem b) Which project is less risky? Why?

Reference no: EM132672216

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