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Company X is interested in investing in a coffee shop in Oxford. The company estimates that the shop would require an initial investment of $

Company X is interested in investing in a coffee shop in Oxford. The company estimates that the shop would require an initial investment of $50000 and following the investment, the shop can generate cash flows for the next 2 years. However, the future cash flows will depend on the demand. There is a 25% chance the cash flows will be $50000 each year, 50% chance the cash flows will be $30000 each year, and 25% chance the cash flows will be $15000 each year. The level of demand will become known in a year while the investment cost will not change. The WACC is 14% and the risk free rate is 6%. What is the decision tree analysis anf what is the value of P for the BS model?

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