The whole idea was to invest in a new product called the "wheat ventilator".The upfront investment is M 40 and that is not too much however the market conditions for the upcoming year looks rather scary with a 30% chance for decline, 25% for normal and 45% for growth. The following year has only two conditions good or bad and for bad the probability is 45%and for good the probability is 55%. The outcome during the first year shows a cashflow of M -10 for decline, M 60 for growth and M 45 for normal. The second year is estimated to deliver a cashflow of M -5 for bad and M 60 for good. Bruce continued with saying that the board estimates the return to be around M 25 meaning that this is a chance of a lifetime! What do you think?" Sam took a deep breath and started by saying; That might be if you have no risk. Given the presentation we need to use our base rate for investments at 7% an then another 8% for the additional risk. Then I think we will be faced with a reasonable return but a totally unacceptable overall risk.Bruce and Hellen did not like what they just heard and asked for a full analysis of this. Help Sam to make an assessment of this ad present your view on whether this is something to go for? Assume that cash flows are received in the end of each year and the investment is paid early year one.