Finance Assignment | Professional Writing
P8-5 (similar to) Question Help Risk and probability Micro Pub, Inc., is considering the purchase of one of two microfilm cameras, R and S. Both should provide benefits over a 10-year period, and each requires an initial investment of $2,000. Management has constructed the following table of estimates of rates of return and probabilities for pessimistic, most likely and optimistic results: a. Determine the range for the rate of return for each of the two cameras b. Determine the value of the expected return for each camera c.
Which camera purchase is riskier? Why? a. The range for the rate of return for camera Ris 20% (Round to the nearest whole number) The range for the rate of return for camera Sis 10% (Round to the nearest whole number.) b. The value of the expected return for camera R is 25.70 %. (Round to two decimal places.) The value of the expected return for camera Sis % (Round to two decimal places.) retur Data Table urn fo (Click on the icon here spreadsheet.) in order to copy the contents of the data table below into a Camera Amount Probability $2,000 1.00 Camera S Amount Probability $2,000 1.00 Initial investment Annual rate of return Pessimistic Most likely Optimistic 15% 25% 0.28 0.37 0.35 2296 29% 3296 0.21 0.58 0.21 35% Print Done answer
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