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Use the following information for questions 1 to 3. ...

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Finance

Use the following information for questions 1 to 3.
Cumnock Corporation (CC) is estimating cash flows from a new product for the next year. The cash flow generated by the new product sales is uncertain.

It has estimated the following probability distribution of after-tax cash flows from these sales for the next year:

Possible State Probability After-tax Cash Flow
1 0.2 $9,000
2 0.3 $12,000
3 0.5 $15,000
Use the above information to answer the following questions. The tax rate is 35%

What is the expected value of the after-tax cash flows from the new design?

What is the standard deviation of the after-tax cash flows?

What is the coefficient of variation of after-tax cash flows?

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