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Project A Probability of technical success 0.8 Probability of commercial success 0.5 Profit/year $2 million Total cost $1 million Project lifetime (years) 10 Project B

Project A Probability of technical success 0.8 Probability of commercial success 0.5 Profit/year $2 million Total cost $1 million Project lifetime (years) 10

Project B Probability of technical success 0.7 Probability of commercial success 0.9 Profit/year $2.5 million Total cost $1.2 million Project lifetime (years) 7

Project C Probability of technical success 0.9 Probability of commercial success 0.8 Profit/year $1.2 million Total cost $1.5 million Project lifetime (years) 5

What is the expected return over the lifetime of each project?

Which one project would you choose now?

Please show the formula calculated for the question above.

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