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For the next 4 questions, consider the following setting: Pfizer is developing a vaccine for a novel corona virus. Since this is a new vaccine,

For the next 4 questions, consider the following setting:
Pfizer is developing a vaccine for a novel corona virus. Since this is a new vaccine, Pfizer only has a very rough estimate of its probability of success. The cost of development and testing is expected to be $38 million. The revenue (if the vaccine succeeds) is expected to be $100 million.
1. What is the minimum probability of success needed for Pfizer to undertake this vaccine project? Write down your answer in percentage. For instance, if your answer is 20%, write down 20.
2. Now suppose the probability of success that Pfizer has initially estimated is 50%. What is the value of this project? [Write your answer in millions. For instance, if your answer is $56.32 million, then write 56.32]
3. If Pfizer spends $5 million on some additional optional technical studies (before they start developing the vaccine), they believe that they will be able to get better estimates for the success probabilities. Suppose that the Pfizer expects that upon completion of these technical studies, the success probabilities may end up being either 20% or 50% or 80%, each with equal likelihood. What is the value of the vaccine project (with the additional technical study)?[Write your answer in millions. For instance, if your answer is $56.32 million, then write 56.32]
4. What is the maximum amount Pfizer should be willing to spend on these optional technical studies? [Write your answer in millions. For instance, if your answer is $56.32 million, then write 56.32]

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