Reference no: EM132484170

Mary Beth Clothes is considering opening an additional suburban outlet. An aftertax cash flow of $180 per day (expected value) is projected for each of the two locations being evaluated.

Site A                                             Site B

Probability   Cash Flows          Probability    Cash Flows

0.20              $90                 0.10                $50

0.40              180                 0.30                 90

0.20              190               0.10                 180

0.20               260             0.30                  240

0.20                  290

Expected value $180 Expected value $180

Question 1: Compute the coefficient of variation for each site. (Do not round intermediate calculations. Round the final answers to 4 decimal places.) Coefficient of variation

Site A Site B

Question 2: Which of these sites would you select based on the distribution of these cash flows?

• Site A
• Site B