Debbie Dallas has projected three possible scenarios for a p…

Debbie Dallas has projected three possible scenarios for a project as follows: Pessimistic:  NOI will be $220,000 the first year and then decline 2 percent per year over a three year holding period. The project will sell for $2.19 Million a t the end of year 3. Most Likely-  NOI will be level at $220,000 per year for the next 3 years (level NOI) and the property will sell for $2.2 Million at the end of year 3. Optimistic – NOI will be $220,000 for the first year, and grow 5 percent per year over the three year holding period. The project will sell for $2.25 Million. the asking price for the property is $2.2 Million. Ms. Dallas thinks that there is a 25 percent probability for the pessimistic scenario, a 40 percent probability of the most likely scenario and a 35 percent probability of the Optimistic scenario. A. Compute the IRRs for each scenario. B.  What is the Expected IRR? C.  Compute the variance and Standard Deviation of the IRRs. D.  IF another project offered a 10% return and had a standard deviation of 5%, which investment would be preferred?  (justify your answer).

PCA is typically used to reduce the number of dimensions of…

PCA is typically used to reduce the number of dimensions of a machine learning problem. For example, we might go from 20 features to just using the top 10 components identified by PCA. Intuitively, this would tell us that we are throwing away some information. But, strangely, when the dataset it noisy, throwing away some of the low PCA components might get us better results. Why is this the case?