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A firm is evaluating the riskiness of two capital budgeting projects. The following table summarizes the NPV and associated probabilities for various outcomes of the two projects Net Present Value Probability Project A Project B 0.25 -$5,000 $0 0.50 $4,000 $2,000 0.25 $10,000 $8,000 Using the above information, the projects can best be characterized relative to one another by the statement a. Project A is more risky than Project B b. Project B is more risky than Project A c. Since Project A has a higher expected NVP, it should be chosen d. Since Project B has a higher standard deviation, it is more risky and should not be chosen

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91813435

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