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You are considering setting up a firm to produce gadgets. The demand for gadgets can be high, medium, or low with equal probability. The corresponding

You are considering setting up a firm to produce gadgets. The demand for gadgets can be high, medium, or low with equal probability.

The corresponding cash flows are: DemandAnnual Cash Flows

High 600

Medium 0

Low-600

These cash flows will begin one year after the investment is made and continue forever. The cost of the project is $300 today. The discount rate is 50% (yes, that

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