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Nile Riverboat co.

Nile Riverboat company a major boat building company highly sensitive to the economy, expects profits next year to be $2,000,000 if the economy is strong, $1,2000,000 if the economy is steady and minus $400,000 if the economy is weak. Mr. Nile believes there is a 30 percent probability of a strong economy, a 40 percent probability of a steady economy and a 30 percent probability of a weak economy.

a. What is the expected value of profits for next year?

b. Compute the standard deviation and the coefficient of variation

c. Assuming that the revenues are normally distributed, what is the probability of earning between 750,000 and 1,3000,000

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M938124

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