5. (10 points) Suppose a company has made $80,000 so far this year. Before the year ends, there is time for the company to invest in one last project. There are two options: Project 1 is safe; it will yield a profit of $60,000 for sure. Project 2 is risky; it will yield a profit of $20,000 with 50% chance and a profit of $120,000 million with 50% chance. Consider two scenarios. In Scenario A, the company had been projected to earn $100,000 for the year. In Scenario B, the company had been projected to earn $200,000 for the year. a. For each scenario, suppose the projection establishes a reference point for the company. Based on the results of Kahneman and Tversky's 1981 study, in which scenario is the company more likely to pursue Project 2, the risky project? Explain. (Hint: In which scenario is the company operating in the loss domain? In the gain domain?) Suppose the amount of utility the company's manager experiences depends on the amount of profit that the company earns, as well as how that profit relates to the reference point r. If r, the manager receives utility u() = - - If r. To the left is the loss domain, where