A Project Offers a 30% Probability of a Payoff After

question 49

Multiple Choice

A project offers a 30% probability of a payoff after one year of $2 million and a 70% chance of a payoff of $1 million.What is the maximum you would invest in this project today if the discount rate is 10%?

• A) $818,181.82
• B) $1,181,818.18
• C) $1,300,000.00
• D) $1,430,000.00

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