FGHG ( UI "I' assign a probability to each direction interest rates may take over the next 5 years. The economist has determined that there is a .50 probability that interest rates will decline. a .40 probability that rates will remain stable, and a .10 probability that rates will increase. a. Using expected value, determine the best project. b. Determine the expected value of perfect information. Reference Problem 13: Place-Plus, a real estate development firm, is considering several alternative development projects. These include building and leasing an ofce park, purchasing a parcel of land and building an office building to rent, buying and leasing a warehouse. building a strip mall. and building and selling condominiums. The financial success of these projects depends on interest rate movement in the next 5 years. The various development projects and their 5-year financial return (in $1,000,0005) given that interest rates will decline. remain stable. or increase, are shown in the following payoff tabfe: Interest Rate Project Decline Stable Increase Ofce park $0.5 $1.7 $4.5 Ofce building 1.5 1.9 2.5 Warehouse 1.? 1.4 1.0 Mall 0.? 2.4 3.6 Condominiums 3.2 1.5 0.6