1. Why does the Variance calculation, leading to Standard Deviation, square all Return differences from the mean, positive or negative?
2. Define Risk Premium.
3. Consider two mutually exclusive investment projects, each with MARR = 14.7%, as given below. On the basis of the NPW criterion, which alternative should be selected? Enter the NPW of the preferred option.
Project A: ($)
-22,700
15,660
14,950
16,700
Project B: ($)
-16,600
12,840
15,830
14,490