TOPIC ist

$11.$ The company ABC is considering two mutually exclusive investment programs which have a lifetime of two years. The cash flows of the two programs $($in thousands of euros$),$ as well as the corresponding probabilities of their realization are presented in the following tables:

$\backslash$table$[[$INVESTMENTA$],[$Year $0$ Year $1$ Cost Probability,Year $2],[$Cash Flow,,,Potential Cash F$,],[-400,40\%,440,60\%,460],[40\%,420],[60\%,380,70\%,410],[30\%,360]]$

$\backslash$table$[[$INVESTMENTB$,,,],[$Year $0,$Year $1,$Year $2],[$Cost Propability Cash Flow,,Chance,Cash Flow,,$],[-700,35\%,480,40\%,490,],[65\%,,60\%,480,],[,340,55\%,380,]]$

A$.$ Consider, based on the criterion of Expected Net Present Value, which of the two investments would you choose, given that the weighted average cost of capital in the case of Investment $A$ is estimated at $10\%,$ Investment $B$ at $8\%,$ while the risk$-$free rate is $3\%.$

B$/.$ Let's say at the end of the first year a prospective buyer comes along and makes an offer to buy the investment you chose to implement in question a$/.$ According to his offer, he intends to buy it instead of the amount of $400,000$ euros. Given his offer, justify whether or not it is profitable to sell the investment at the end of the first year.