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The net present values for two investment projects for each of three states of the economy are summarised in the table below. High growth Medium
The net present values for two investment projects for each of three states of the economy are summarised in the table below. High growth Medium growth Low or no growth Possible state of the economy Project 1 [m] Project 2 [m] 26 10 6 12 9 5 The probabilities of the states of the economy for the duration of these projects are as follows: High growth 0.3 Medium growth 0.5 Low or no growth 0.2 What is the expected net present value of Project 2 using the Bayes-Laplace criterion. Calculate your answer correct to 1 decimal place
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