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A Firm Is Considering Two Projects,A and B,with the Following

Question 52

Multiple Choice

A firm is considering two projects,A and B,with the following probability distributions for profit.  Prafit  ($1,000s)   Praject A Prabability (%)  Project B Prabability (%) $2010104015156050258015401001010\begin{array} { c c c } \begin{array} { c } \text { Prafit } \\\text { (\$1,000s) }\end{array} & \begin{array} { c } \text { Praject } A \\\text { Prabability } ( \% ) \end{array} & \begin{array} { c } \text { Project } B \\\text { Prabability } ( \% ) \end{array} \\\hline \$ 20 & 10 & 10 \\40 & 15 & 15 \\60 & 50 & 25 \\80 & 15 & 40 \\100 & 10 & 10\end{array} Given the above,a decision maker using the coefficient of variation rule would


A) choose project A.
B) choose project A only if risk averse.
C) choose project B.
D) choose project B only if risk loving.
E) not be able to make a decision using that rule.

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