# Devon

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A person must decide whether or not to proceed with a particular investment project. If the project succeeds, She will gain \$15 million. If the project fails, she will lose \$3 million. She estimates there is a 20% chance that the project will succeed and an 80% chance it will fail.

There is a consultant that could tell her with certainty if the project succeed or fail, but only for a fee. What is the most that she should be willing to pay the consultant for the information? Explain. Assume that she correctly estimated the probabilities of the projectâ€™s likely success and failure.

• Economics - ,

A person must decide whether or not to proceed with a particular investment project. If the project succeeds, She will gain \$15 million. If the project fails, she will lose \$3 million. She estimates there is a 20% chance that the project will succeed and an 80% chance it will fail.

There is a consultant that could tell her with certainty if the project succeed or fail, but only for a fee. What is the most that she should be willing to pay the consultant for the information? Explain. Assume that she correctly estimated the probabilities of the projectâ€™s likely success and failure.