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    Making Calculations Based on Expected Cash Flows

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    The XYZ Company has estimated the expected cash flows [in thousands] for 1996 to be as follows:

    Probability Cash Flow
    10 10
    15 140
    50 150
    15 180
    10 210

    a. Expected value
    b. Standard deviation
    c. Coefficient of variation
    d. If the true cash flows are normally distributed with the mean from (a) and standard deviation from (b), what is the probability that the true cash flow will be less than $100,000?

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    Solution Preview

    Given the probabilities and cash flows, you will use the following formulas where Pi = probability, CFi = cash ...

    Solution Summary

    This solution provides a calculation of how you calculate the expected value of cash flows, the expected standard deviation, of a calch the coefficient of variation and cash flow of series of cash flow.