16. Which of the following statements about capital budgeting is correct? A. The timing of cash flows is irrelevant in capital b
1 answer:
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Answer:
option B
Explanation:
In other to know how return fluctuation can be predicted with for instance, x%, predictability, one has to look at the normal distribution curve of return (average returns) to standard deviation of those returns. (check the attached file for additional details).
Hence, to be 95% sure that investment losses are less than 8% one needs to look at 95% of all returns which infact Mean return plos or minus 20. If the lower bound of this interval is less than 8% then the investment needs to be selected
check attached file for additional details
