2. Return calculations For each ofthe investments shown in the following table, calculate the rate of return eamed over the unspecified time period, 4. Risk analysis Solar Designs is considering an investment in an expanded product line: Two possible types of expansion are being considered. Aer investigating the possible outeomes, ‘the company made the estimate shown in te following table ‘a Determine the rage ofthe rates of return foreach ofthe two projects. bh Which project is lssrsky? Why? I you were making the investment decision, which one would you choose? Why? ‘What docs this imply about your feelings toward risk? 4. Assume that expansion B's most likely outcome is 21% per year and that all other fais remain the same. Does tis change your answer to parc? Why? 5. Risk and probability Micro-Pob, Inc. is considering the purchase of ane of two microfilm ‘cameras, R and S. Both should provide benefits over a 10-year period, and each requires an initial investment of $4,000, Msuagement has constructed the following table of estimates of rates of rtum and probabilities for pessimistic, mos likely, and optimist results! ‘a. Determine the range forthe rate of return for each ofthe two cameras. '. Determine the expected value of return for each camera «Purchase of which eamera is riskier? Why?