An outside venture investor is considering investing Rs. 1,000,000 in either your new venture or another venture, or investing Rs. 500,000 in each venture. At the end of one year, the value of your venture might be either Rs. 0 or Rs. 10,000,000 (10 million). The other venture is expected to be worth either Rs. 500,000 or Rs. 5,000,000 (5 million) at the end of one year. Which investment choice (yours, the other venture, or half-and-half) do you think the venture investor would choose? Why?

Answer rating: 100% (QA)

To determine which investment choice the venture investor would choose we need to compare the expect... View the full answer