Question

Please show work, thank you in advance.

What is the coefficient of variation of the following income statement sales projection given the following information?

Possible Sales Level (in 000's)	Probability
1000	10%
2000	15%
2500	50%
2800	20%
3000	5%

1. 1.41
2. .22 (correct)
3. 12%
4. 18.2x

What is the standard deviation of the following income statement sales projection given the following information?

Possible Sales Level (in 000's)	Probability
0	10%
100	15%
400	40%
450	30%
600	5%

1. $169.26 (correct)
2. $340
3. $387.50
4. $400

Answer 1

Answer to Question 1:

Expected Value = 0.10 * 1,000 + 0.15 * 2,000 + 0.50 * 2,500 + 0.20 * 2,800 + 0.05 * 3,000
Expected Value = 2,360

Variance = 0.10 * (1,000 - 2,360)^2 + 0.15 * (2,000 - 2,360)^2 + 0.50 * (2,500 - 2,360)^2 + 0.20 * (2,800 - 2,360)^2 + 0.05 * (3,000 - 2,360)^2
Variance = 273,400

Standard Deviation = (273,400)^(1/2)
Standard Deviation = 522.87666

Coefficient of Variation = Standard Deviation / Expected Value
Coefficient of Variation = 522.87666 / 2,360
Coefficient of Variation = 0.22

Answer to Question 2:

Expected Value = 0.10 * 0 + 0.15 * 100 + 0.40 * 400 + 0.30 * 450 + 0.05 * 600
Expected Value = 340

Variance = 0.10 * (0 - 340)^2 + 0.15 * (100 - 340)^2 + 0.40 * (400 - 340)^2 + 0.30 * (450 - 340)^2 + 0.05 * (600 - 340)^2
Variance = 28,650

Standard Deviation = (28,650)^(1/2)
Standard Deviation = 169.26