The XYZ Company has estimated the expected cash flows [in thousands] for 1996 to be as follows:
Probability Cash Flow
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?
Given the probabilities and cash flows, you will use the following formulas where Pi = probability, CFi = cash ...
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.