Question: Question 3 Pharmakin Ltd , a pharmaceutical company, is evaluating an investment project related to drug development. The project's success depends on the state of

Question

3

Pharmakin Ltd

,

a pharmaceutical company, is evaluating an investment project related to drug development. The project's success depends on the state of the economy. Management identified three possible states and associated returns:StateBoomNormalRecessionReturn

20 % 15 % 10 %

RequiredDecide on the probability of each state occurring and calculate the expected return.Round off to two decimal places where applicable.

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