If the firm learns that the complicated technology can be made more stable with a few tweaks increasing the cost by 5.5million and increasing the probability of a launch to 50%. Is it worth for the firm to invest the $500,000 in tweaks?
a. No, because it decreases the total expected value
b. Yes, because it increases expected value
c. No, because it increases risk
d. Yes, because tweaking is good
b
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Which of the following is most central to the understanding of the economic crisis of 2008?
a. the decline of the stock market in late 2007 b. the housing boom (2001-2005) and bust (2007-2008) c. the sharp rise in oil prices in 2008 d. unethical investment practices beginning in 2000
Pension funds resemble life insurance companies in the sense that:
A. they offer the ability to make premium payments today in return for a promised payment under specified future circumstances. B. they both are better investments the longer you live. C. the payoff occurs only occurs when a person dies. D. they accept deposits.