Question 2 2 pts Your startup company is at a crossroads. You have a technology that is high demand, with the possibility of multiple companies willing to buy your startup. Or you can keep developing yourself taking out a $25 million loan from your parents assume no interest on this loan, but you must pay it back regardless of what happens) If you sell there is a 50% chance of 1 bidder for your startup and you will sell for $5 milion. There is a 30% chance of 2 bidders, and you will sell for $8 million. And a 20% chance for more bidders, in which case you will sell for $15 million If you take the loan and continue development, there is a 2% chance you company will be the next unicorn and you will be worth $1,000 millon (pross. There is a 30% chance your company will successfully develop a new technology and you will be worth $30 million (gross). And there is a 68% chance you will need more time to develop requiring another loan of $10 million from your parents tassume no interest on this loan, but you must pay it back regardless of what happens) With that second loan, you have a do% chance of being successful and being worth $40 million Cross). There a 10% chance your technology will not quite work the way you hoped and the company will be worth $10 million grosso. And there is a 50% chance it will all fail, the employees will not pet paid and the company will be worth $0 Gross). Asume you maximize expected value. What is the expected value of your optional decision? Please write your answer in units of Smiles and round to 2 decimal places. For example, if the answer is 1.250.000 ou enter is 1.25 Question 2 2 pts Your startup company is at a crossroads. You have a technology that is high demand, with the possibility of multiple companies willing to buy your startup. Or you can keep developing yourself taking out a $25 million loan from your parents assume no interest on this loan, but you must pay it back regardless of what happens) If you sell there is a 50% chance of 1 bidder for your startup and you will sell for $5 milion. There is a 30% chance of 2 bidders, and you will sell for $8 million. And a 20% chance for more bidders, in which case you will sell for $15 million If you take the loan and continue development, there is a 2% chance you company will be the next unicorn and you will be worth $1,000 millon (pross. There is a 30% chance your company will successfully develop a new technology and you will be worth $30 million (gross). And there is a 68% chance you will need more time to develop requiring another loan of $10 million from your parents tassume no interest on this loan, but you must pay it back regardless of what happens) With that second loan, you have a do% chance of being successful and being worth $40 million Cross). There a 10% chance your technology will not quite work the way you hoped and the company will be worth $10 million grosso. And there is a 50% chance it will all fail, the employees will not pet paid and the company will be worth $0 Gross). Asume you maximize expected value. What is the expected value of your optional decision? Please write your answer in units of Smiles and round to 2 decimal places. For example, if the answer is 1.250.000 ou enter is 1.25
