Question: An IT firm can submit a bid for Project 1 or Project 2. For Project 1, there is a 35% chance that the firm will

An IT firm can submit a bid for Project 1 or Project 2. For Project 1, there is a 35% chance that the firm will win the contract, which is estimated to be $150,000 in profits. There is however 65% probability that it will not win the contract for Project 1. In this case, the firm first invests $200,000 and then gets zero reimbursements for this investment. For Project 2, there is a 20% probability that the firm will gain $120,000, a 35% probability that it will lose $90,000, and a 45% probability that it will lose $5,000. Based on the EMV analysis, which of the projects should the firm bid on?

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