Question: Blazsik.com is considering a plan to develop an online finance tutoring package that has the cost and revenue projections shown below. One of Blazsik's larger
Blazsik.com is considering a plan to develop an online finance tutoring package that has the cost and revenue projections shown below. One of Blazsik's larger competitors, Online Professor (OP), is expected to do one of two things in Year 5: (1) develop its own competing program, which will put Blazsik's program out of business, or (2) offer to buy Blazsik's program if it decides that this would be less expensive than developing its own program. Blazsik thinks there is a 35% probability that its program will be purchased for $5.6 million and a 65% probability that it won't be bought, and thus the program will simply be closed down with no salvage value
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