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You are an analyst for Whoville Industries. Your company may be obtaining a gorfling wumbus. In just under 4 years, it will lay a golden
You are an analyst for Whoville Industries. Your company may be obtaining a gorfling wumbus. In just under years, it will lay a golden egg. There is a chance of that egg being large. A large egg could be sold for WhoLoots. There is a chance of that egg being medium. A medium egg could be sold for WhoLoots. There is a chance of that egg being small. A small egg could be sold for WhoLoots. In additional years, it will lay another egg. There is a chance of that egg being platinum. A platinum egg could be sold for WhoLoots. There is a chance of that egg being lead. A lead egg could be sold for WhoLoots. The likelihood of the second egg being platinum is independent of the size of the first egg. Eggs are laid on December st Today is January st The appropriate discount rate is per year. The cost of maintaining a gorfling wumbus is WhoLoots per year spent at the beginning of each year including the year obtained. Immediately after the second egg is laid, you sell the gorfling wumbus for WhoLoots.
What is the expected net present value of possessing a gorfling wumbus?
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