Let's assume that after graduation, you have two options: Either you are going to set up...
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Let's assume that after graduation, you have two options: Either you are going to set up a consulting firm with your friends or you are going to accept an offer of a firm with an annual total salary of 50,000 TL. If you set up your own consulting firm, following three events may happen: i) Your firm becomes very successful and each partner gets 150,000 TL. per year with 0.2 probability. ii) Everything goes alright and each partner gets 70,000 TL per year with 0.5 probability. iii) Things do not happen as you expected and each partner looses 100,000 TL. monetary value(EVM) B) What Would be your decsion A) Find expected monetary Value (EVM) Let's assume that after graduation, you have two options: Either you are going to set up a consulting firm with your friends or you are going to accept an offer of a firm with an annual total salary of 50,000 TL. If you set up your own consulting firm, following three events may happen: i) Your firm becomes very successful and each partner gets 150,000 TL. per year with 0.2 probability. ii) Everything goes alright and each partner gets 70,000 TL per year with 0.5 probability. iii) Things do not happen as you expected and each partner looses 100,000 TL. monetary value(EVM) B) What Would be your decsion A) Find expected monetary Value (EVM)
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Answer rating: 100% (QA)
To find the expected monetary value EMV we need to calculate the weighted average of the possible ou... View the full answer
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Posted Date:
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