The NPV of a professional football team is $200 million. There is a 70% probability that the
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The NPV of a professional football team is $200 million. There is a 70% probability that the team will get a new stadium within 1 year and the value of the team will increase to 350 million dollars. To keep the team from moving, a wealthy local philanthropist offered to buy the team for $200 million today.
Given a 12% discount rate, how much more would the current owner be willing to offer to the benefactor to keep the offer on the table until the end of the year?
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