Based on the information given in the paragraph above, the measures that fill in the blanks in order are:
- Coefficient of Variation
- Standard deviation
- Expected return
- Risk
When we have an investment with a higher expected return and a higher standard deviation than another investment, we can then base our decision on the amount of risk that we incur per return of the investment.
This measure is called the coefficient of variation and it is calculated thus:
<em>= Standard deviation / Expected return </em>
This will then show you the risk incurred per unit of return. The investment with the lower coefficient is the better one.
<em>In choosing between two investments, if one has the higher expected return but the other has the lower standard deviation, we use another measure of risk called </em><em><u>Coefficient of Variation. </u></em><em>To obtain this measure we divide the </em><em><u>Standard deviation</u></em><em> by the </em><em><u>Expected return</u></em><em>. This measure shows the amount of </em><em><u>Risk</u></em><em> per unit of return...</em>
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Answer: 7 years
Explanation:
There are 50 lights and it will cost $50 to replace each light.
Total replacement cost is therefore;
= $2,500
The company gets to save $350 per year if they use LED bulbs.
= 2,500/350
= 7.14 years
= 7 years
<span>Increased Contribution Margin = $40,000 x 70%, or 28,000.
New ad campaign costs $22,000, so the net Income increase will be the difference, $6,000</span>
