Question
XYZ Corporation is considering investing in a new project that has a potential return of $500,000. However, there is also a 20% chance that the
XYZ Corporation is considering investing in a new project that has a potential return of $500,000. However, there is also a 20% chance that the project could fail, resulting in a loss of $250,000. The company wants to conduct a risk analysis to determine the expected value of the project and to decide whether to invest in it. What is the expected value of the project, and what is the appropriate risk response for XYZ Corporation?
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