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There is an investment. It can bring you $200 in good situations and $50 in bad situations. The probability of good situations is 0.4, and

There is an investment. It can bring you $200 in good situations and $50 in bad situations. The probability of good situations is 0.4, and the probability of bad situations is 0.6. The cost of the investment is $80. Try to complete the following table. And will you refuse this investment or not? Why?

Not do

Do

GOOD

BAD

GOOD

BAD

Present Earnings

200

150

200

150

Investment: earnings

0

0

200

50

Total earnings

Debt

100

100

100

150

Equity

V(D)

V(E)

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