3. Electron Wizards, Inc. (EWI) has a new idea for producing TV sets, and it is planning to enter the development stage. Once the product is developed, the company expects to sell its new product for a price p, with expected value p = $30,000. The price p is correlated with the market return as E[(p P) (M 1m)] = 20,000omu. To develop the product, EWI must invest in a research and development project. The cost of this project will be known shortly after the project is begun. The current estimate is that the cost will be either C= $20,000 or C= $25,000, and each of these is equally likely. (i) What is the expected rate of return of this project? (ii) What is the beta of this project? [10 marks] (10 marks) 3. Electron Wizards, Inc. (EWI) has a new idea for producing TV sets, and it is planning to enter the development stage. Once the product is developed, the company expects to sell its new product for a price p, with expected value p = $30,000. The price p is correlated with the market return as E[(p P) (M 1m)] = 20,000omu. To develop the product, EWI must invest in a research and development project. The cost of this project will be known shortly after the project is begun. The current estimate is that the cost will be either C= $20,000 or C= $25,000, and each of these is equally likely. (i) What is the expected rate of return of this project? (ii) What is the beta of this project? [10 marks] (10 marks)