1. GammaGo is a real estate company. It is considering to develop a community of single-family houses (Project "House") att₀. Project House costs 100 att₀and 88 at t₁. This project alone can generate profits 242 att₂. Once GammaGo decides to invest in Project House, it needs to pay the costs att0andt₁. Att₁, GammaGo suddenly finds that it can also build a bunch of condos (Project "Condo"). Project Condo costs 80 att₁and can generate profits 110 att_2. Suppose that att₀, GammaGo does not know that Project Condo is available att₁; that is, att₀, it thinks that Project House is the only project available. The rate of return is 10%.

(a)Will GammaGo invest in Project House att₀?

(b)If Project House and Project Condo are independent, will GammaGo invest in Project Condo att₁?

However, Condos will reduce the demand for single-family houses. So, if the Project Condo is taken, the profit generated by Project House will decrease to 209.

(c) Will GammaGo invest in Project Condo att₁?