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Consider again the sport hotel example and Example 9.1. Suppose that if the franchise is accepted the value of the hotel is not $ million

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Consider again the sport hotel example and Example 9.1. Suppose that if the franchise is accepted the value of the hotel is not $ million but instead $8.75. Everything else. Including first year expenses, is the same as shown in the example. Incorporating the real option, what probability of the franchise being granted would represent a fair investment?" (that is, a probability such that amy higher value would create a positive expected value) Place your answer in percentage from with at least 2 decimal places. For example, and answer of fifteen point four three percent would be entered 15.43. Consider again the sport hotel example and Example 9.1. Suppose that if the franchise is accepted the value of the hotel is not $ million but instead $7.75. Everything else. Including first year expenses, is the same as shown in the example. Incorporating the real option, what probability of the franchise being granted would represent a fair investment?" (that is, a probability such that any higher value would create a positive expected value) The data is changed as follows: Projected outflows: Projected inflows (at the end of year 3): What franchise(S): the hotel will be worth 7.75 million it opens; Without franchise(s): the hotel will be worth $2 million when it opens. Build the tree, follow the same steps to compute the value at each mode. Consider again the sport hotel example and Example 9.1. Suppose that if the franchise is accepted the value of the hotel is not $ million but instead $8.75. Everything else. Including first year expenses, is the same as shown in the example. Incorporating the real option, what probability of the franchise being granted would represent a fair investment?" (that is, a probability such that amy higher value would create a positive expected value) Place your answer in percentage from with at least 2 decimal places. For example, and answer of fifteen point four three percent would be entered 15.43. Consider again the sport hotel example and Example 9.1. Suppose that if the franchise is accepted the value of the hotel is not $ million but instead $7.75. Everything else. Including first year expenses, is the same as shown in the example. Incorporating the real option, what probability of the franchise being granted would represent a fair investment?" (that is, a probability such that any higher value would create a positive expected value) The data is changed as follows: Projected outflows: Projected inflows (at the end of year 3): What franchise(S): the hotel will be worth 7.75 million it opens; Without franchise(s): the hotel will be worth $2 million when it opens. Build the tree, follow the same steps to compute the value at each mode

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