QUESTION 3: Buying a rm [25 points] Suppose that Warren Buffet is considering buying Mystctious Practices, Inc. (MPI). Due to nancial distress unrelated to MPI's operations, MPI's current owners have fallen on hard times and are considen'ng selling the company; Buffet is the only potential buyer for MP1. Buffet can make a take-it-orleaye-it offer no MP1, and he judges that there are four possible scenarios for the technology MP1 is currently using. For now, suppose there is nothing he can do to distinguish between the four situan'ons, and suppose he assigns each situation an equal probability. Esaaauaaaaass _ aaa- aaaaaaaalls You can assume that h'l's owners would accept an offer equal to their valuation, and they know what the state of their technology is. (a) [5 points] West are Mr. Buffet's expected prots if he offers a price of $1 billion? must is the probability of Sale? {b} [5 points] What ate M. Buffet's expected prots if he offers :1 price of $2 billion? What is the probability of sale