Determine the Coefficient of Variation for the Following Annual Cash

question 44

Multiple Choice

Determine the coefficient of variation for the following annual cash inflows from an investment project: $$\begin{array} { l l } \text { Cash Flow } & \\( \$ 000 ) & \text { Probability } \\\$ 2,000 & 0.10 \\\$ 2,500 & 0.20 \\\$ 3,000 & 0.30 \\\$ 3,500 & 0.20 \\\$ 4,000 & 0.20\end{array}$$

• A) $624.50
• B) 125.8
• C) 0.201
• D) Cannot be determined

---

Definitions:

Event W

A specific occurrence or situation, often designated "W" for identification purposes in statistical or probabilistic contexts.

Probability

A numeric scale from 0 to 1 indicating how probable it is for an event to occur.

Outcomes

The possible results or consequences of an action, experiment, or process.

Classical Probability

Classical probability is a theoretical probability calculation based on the assumption that all outcomes are equally likely and there are a finite number of outcomes.