# Coefficient of Variation

Bridget's Modeling Studios is considering opening in a new location in Miami.

An aftertax cash flow of $120 per day (expected value) is projected for each of

the two locations being evaluated.

Which of these sites would you select based on the distribution of these cash

flows (use the coefficient of variation as your measure of risk)?

Site A Site B

Probability Cash Flows Probability Cash Flows

.15 $ 80 .10 $ 50

.50 110 .20 80

.30 140 .40 120

.05 220 .20 160

.10 190

Expected value $120 Expected value $120

https://brainmass.com/business/finance/coefficient-of-variation-131888

#### Solution Summary

The solution explains the calculation of Coefficient of Variation

$2.19