Essay
David S Pumpkins is planning to open a sporting goods store.However, the initial investment is $120,000.He currently has this money in a certificate of deposit earning 10 percent.He may leave it there if he decides not to open the store.If he opens the store and it is successful he will generate a profit of $50,000.If it is not successful, he will lose $90,000.What would the probability of a successful store have to be for David to prefer this to investing in a CD?
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p(50,000)- (1 - p)(9...View Answer
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