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3) A company decides to invest in an upgraded server for their online businesses. It costs them $20,000,000 upfront. For the next five years, revenue
3) A company decides to invest in an upgraded server for their online businesses. It costs them $20,000,000 upfront. For the next five years, revenue is expected to increase by $4 million, $5 million, $4 million, $9 million, and $10 million, respectively. Each year, however, the company will have increased costs of 10% of revenue. If the firm's discount rate is 8%, was this a good business decision? 4) You can invest in two stocks. A has three possibilities: .35 chance of losing 10%, .5 chance of gaining 10%, and .15 chance of gaining 20%. B has the following: .5 chance of losing 5%, .35 chance of gaining 15%, and .15 chance of gaining 30%. Which should you invest in to receive higher returns
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