Decision-Making under Uncertainty. Consider an innovation that is expected to generate $100,000 in profits at the end of each of the next 4 years, and after that market competition is expected to drive the profits from the innovation to zero. (a) If the interest rate (or discount rate) is 10%, how much should the firm be willing and able to pay to research and develop the innovation? (b) No suppose that the payoff is uncertain. The interest rate is the same, but ncww there is a 40% chance that the innovation generates $60,000 in profits and there is a 60% chance that it generates $140,000 in profits each of the next 4 years. How much should the firm be willing and able to pay to develop the innovation now