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3. EtaGo has two available projects, A and B. A costs 100 at to and will generate a cash ow 242 at 1. B costs

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3. EtaGo has two available projects, A and B. A costs 100 at to and will generate a cash ow 242 at 1. B costs 340 at to and will also generate the cash ow 242 at 1. If EtaGo invests in both A and B , the total cash ow will be 605 at 1. (a) What is EtaGo's optimal investment at to? (b) Suppose that another company wants to sell one project A to EtaGo at the price 30. Will EtaGo buy? Will it invest in project B

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