Gensco Corp. is preparing to develop a new product that requires an investment of $500,000. Gensco...
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Gensco Corp. is preparing to develop a new product that requires an investment of $500,000. Gensco believes that if it develops the product there is a 75% chance that it will be able to sell the product to a manufacturer at a profit of $1,000,000. Legal issues are such that if it is unable to sell the product at this price, it will not sell the product at all. What is the expected value of the project? Gensco Corp. is preparing to develop a new product that requires an investment of $500,000. Gensco believes that if it develops the product there is a 75% chance that it will be able to sell the product to a manufacturer at a profit of $1,000,000. Legal issues are such that if it is unable to sell the product at this price, it will not sell the product at all. What is the expected value of the project?
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