Dear All,
Kindly get the solution and help me.
Question
Yenki Ltd. is considering two mutually exclusive projects A and B. Project A costs Rs.30000.00 and Project B Rs.36000.00. The NPV probability distribution for each project is as given below:
|
Project A
|
Project B
|
||
|
NPV Estimate
|
Probability
|
NPV Estimate
|
Probability
|
|
Rs.3000
|
0.1
|
Rs.3000
|
0.2
|
|
Rs.6000
|
0.4
|
Rs.6000
|
0.3
|
|
Rs.12000
|
0.4
|
Rs.12000
|
0.3
|
|
Rs.15000
|
0.1
|
Rs.15000
|
0.2
|
You are required to compute
1) the expected Net Present Value of Projects A & B.
2) the reisk attached to each project i.e.., standard deviation of each probability distribution.
3) The profitability index of each project.
Which project do you consider more risky and why ?
Please send me the answers with working its urgent……latest by today evening.
Regards,
Srinivas
CAclubindia
