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A company has invested $50,000 in a project with an expected return of $80,000. However, there is a 30% chance that the project will fail,
A company has invested $50,000 in a project with an expected return of $80,000. However, there is a 30% chance that the project will fail, resulting in a loss of $20,000. To manage the risk, the company can purchase insurance at a cost of $5,000, which will cover the loss if the project fails. What is the expected value of the project with insurance, and should the company purchase the insurance?
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