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ghklhfdssttgyuji Jenny is considering buying a chain of coffee shops and operating it for one year. The cash flow at the end of the year
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Jenny is considering buying a chain of coffee shops and operating it for one year. The cash flow at the end of the year is A if people love her coffee, and "B" if people just like her coffee. The probability of people loving her coffee or liking her coffee is the same, 0.5. She can buy the chain right now. Or she can commission a one-year study to figure out people's taste towards her coffee and decide whether to buy the chain at the end of the year. After some calculations, she realized that the most she is willing to pay for the study is $ 1 million. She realized an error in her initial estimates. After correcting the error, the cash flow at the end of the year is "C" if people love her coffee, and D if people just like her coffee. (0.5 x A +0.5 x B) = (0.5 x C +0.5 x D) and A>C. She redoes her calculation, and realized the most she is willing to pay for the study is $ X million (X>0). Which of the following is most likely? A.X>1 B. XStep by Step Solution
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