Management has invested $8 million in a project. The payoffs from the project will either be zero
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Management has invested $8 million in a project. The payoffs from the project will either be zero or a present value of $20 million. Either event is equally likely. The original investment cost will be deducted in computing the profit from the project. Now management learns that it can obtain perfect information about the outcome from the project. What is the max- imum value of that information for this investment project?
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