Economic

Your work for a domestic Japanese company. One of your junior managers has come to you for advice. He has been trying to assess whether or not to make an investment that he feels has the potential of being profitable. He asked the finance department to help with the analysis. Their response was this:

We estimate: a profit of $100,000 if the economy is growing rapidly, a profit of $50,000 if it is growing moderately, a loss of $50,000 if the economy is flat, and a loss of $100,000 if the economy is stagnating.

The junior manager is unsure how to use this information. Explain to him the process he should go through in order to reach a decision on whether or not it is a good investment. Note that your answer should include a calculation based upon your own reasonable estimates. Also, include some discussion on "risk" vs "uncertainty" that is relevant to this case