Liberty Corp. was set up to take large risks and is willing to take the greatest risk possible. Benson Co. is more typical of the average corporation and is risk averse.
Which of the following four projects should Liberty Corp. choose? Compute the coefficients of variation to help you make your decision.
Which one of the four projects should Benson Co. choose based on the same criteria of using the coefficient of variation?
Project
Returns: Expected Value
Standard Deviation
1
628,000
935,000
2
783,000
404,000
3
85,000
125,000
4
148,000
99,000