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Suppose a project has a 65 percent chance of being completed successfully and earning $2,000,000. It also has a 15 percent chance of earning an
Suppose a project has a 65 percent chance of being completed successfully and earning $2,000,000. It also has a 15 percent chance of earning an additional $3,000,000 in revenue, and it has a 20 percent chance of a loss of $700,000. The investor could also deposit her money in the bank and earns without risk $1,000,000. a) Does she have to invest in the project? b) Calculate the risk for investing in the project.
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