An investor is deciding whether to buy into a new firm or simply keep their money in a mattress. As a first step in this decision, the investor needs to assess the investment prospect. The investor initially has $190,000. The required investment in the firm is $100,000. If the business succeeds, the investor receives $160,000 in net revenues and ends up with $250,000 (the money not invested and the $160,000 return). If the business fails, the investor loses the entire investment and is left with $90,000. The probability that the business will fail is 1/3. The investor has utility function U(w)=w (a) Compute the expected monetary value of the investment prospect (including the initial wealth component). (b) Compute the expected utility of the investment prospect (again, including the initial wealth component. (c) Will the investor actually invest in the project. (Hint: Does the investor prefer the project to keeping the $190,000 for sure?) An investor is deciding whether to buy into a new firm or simply keep their money in a mattress. As a first step in this decision, the investor needs to assess the investment prospect. The investor initially has $190,000. The required investment in the firm is $100,000. If the business succeeds, the investor receives $160,000 in net revenues and ends up with $250,000 (the money not invested and the $160,000 return). If the business fails, the investor loses the entire investment and is left with $90,000. The probability that the business will fail is 1/3. The investor has utility function U(w)=w (a) Compute the expected monetary value of the investment prospect (including the initial wealth component). (b) Compute the expected utility of the investment prospect (again, including the initial wealth component. (c) Will the investor actually invest in the project. (Hint: Does the investor prefer the project to keeping the $190,000 for sure?)