In making a business decision, the company estimates a 10% probability that the cash inflow from a project is $ 2,000, a 40% probability that the cash inflow is $5,000 and a 50% probability that the cash inflow is $6,000 .
i ) Calculate the company’s expected value of cash inflow .
ii ) Calculate the standard deviation
iii ) If a second project has the same expected value of cash inflow , but a smaller standard deviation , which project would you recommend ?