Contemporary Engineering Economics 6th Edition by Chan Park

تمرين 17

Consider the following investment cash flows over a two-year life:
(a) Compute the mean and variance of PW of this project at i = 10% if
1. A 1 and A 2 are mutually independent.
2. A 1 and A 2 are partially correlated with 12 = 0.3
(b) In part (a)-(1), if random variables ( A 1 and A 2 ) are normally distributed with the mean and variance as specified in the table, compute the probability that the PW will be negative. (See Appendix B.)