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.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Authors: Ronald W. Shonkwiler
2013th Edition
146148510X, 978-1461485100
