Question: What decision should Mary make using the expected value approach? Assume there is no inflation. Assume now that there is an expected inflation of 2%

What decision should Mary make using the expected value approach? Assume there is no inflation.

Assume now that there is an expected inflation of 2% per year in the next two years (use it only to compare expected values coming from different years, do not change the rent, the rent is $4,000 in both years). What decision should Mary make using the expected value approach?

What decision should be taken if the inflation is estimated to be 3% for both years?

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