Mountain Ski Corp. was set up to take large risks and is willing to take the gre

Question

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.

Projects Returns:
Expected Value Standard
Deviation
A $ 527,000 $ 834,000
B 682,000 306,000
C 74,000 135,000
D 140,000 89,000

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 of the following four projects should Mountain Ski Corp. choose?

Project A
Project B
Project C
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 A
Project B
Project C
Project D

Explanation / Answer

As Mountain ski is risk lover so it choose,

Lakeways is risk averse,

so it will choose

Exp VALue STD deviation CV 527,000 834,000 1.582543 682,000 306,000 0.44868 74,000 135,000 1.824324 140,000 89,000 0.635714

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