Question: Mr. Monty Terry, a real estate investor, is trying to decide between to potential small shopping center purchases. His choices are the Wrigley Village and Crosley Square. The anticipated yearly cash inflows from each are as follows:
|
Wrigley Village Yearly After-tax Cash Inflow
|
Crosley Square Yearly After-tax Cash Inflow
|
|
(In Thousands)
|
Probability
|
(In Thousands)
|
Probability
|
|
$10
|
0.1
|
$20
|
0.1
|
|
30
|
0.2
|
30
|
0.3
|
|
40
|
0.3
|
35
|
0.4
|
|
50
|
0.3
|
50
|
0.2
|
[A] Calculate the expected value of the cash flow from each shopping center.
[B] Calculate the coefficient of variation for every shopping center?
[C] Find which shopping center has more risk?