Production tooling

SoccerBoss
Category:
Business & Finance
Price: $5 USD

Question description

The
GE is in process of purchasing a production tool. In their search, they have
gathered the following information about two possible tools.


 
                                     A                                       B



Initial
Investment                    12,000                           12,000


                                                                   A                                  B



                                                Return Probability                    Return  Probability


Pessimistic                                     15.00%  0.32                      9.00%  0.3



Most Likely                                     18.00%  0.45                       18.00%  0.45



Optimistic                                       21.00%  0.25                        25.00%  0.25



   



A) Compute expected
rate of return for each choice.



B) Compute variance
and standard deviation of rate of return for each machine.



C) Based on the
coefficient of variation, which copier should they purchase?




Tutor Answer

(Top Tutor) Daniel C.
(997)
School: University of Virginia
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