Suppose you are very favorably considering a venture that has the following risk-return profile.

ProbabilityReturn

1/3-10

1/30

1/3+13

E(Return)= 1/3 x -10+1/3 x 0+1/3 x 13=+1.0

Since the expected return = 1.0, you give it a thumbs up.

But the venture capitalist who will fund the venture requires that he receive 20% of any positive profit.How would that change your verdict??