HW1_figures_ProblemSet - Question 1: Software...

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Development software for new platform Market for new platform -1,000,000 New platform fails [p=0.3] 500,000 EV=4,350,000 New platform succeeds [p=0.7] Do not market for new platform -500,000 5,000,000 0 0 6,000,000 Hire Consultant Market Platform - 500,000 New Platform Fails [p=0.3] EV = 3,500,000 New Platform Succeeds [p=0.7] Don’t Market Platform Market Platform Don’t Market Platform 0 5,000,000 0 Question 1: Software Development/Marketing Problem 5,000,000 -500,000
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Heavy Preparation Light Preparation Stick with Rich Uncle Financing -30,000 -10,000 0 0 0 0 Question 2: Venture Capital Financing Decision Tree VC#1 – Yes [p=0.3] EV=39,500 VC#1 – No [p=0.7] VC#1 – Yes [p=0.3] EV=22,000 VC#1 – No [p=0.7] 50,000 50,000 VC#2 – Yes [p=0.2] VC#2 – No [p=0.3] VC#2 – Yes [p=0.7] VC#2 –No [p=0.8] 50,000 50,000 EV=10,000 EV=35,000 40,000 -10,000 40,000 20,000 -30,000 20,000
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Success in Step 1 [p=0.8] Success in Step 2 [p=0.8] Success in Step 3 [p=0.8] 2,500,000 -1,500,000 -1,000,000 -500,000 Failure in Step 2 [p=0.2]
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This homework help was uploaded on 02/20/2009 for the course AEM 4240 taught by Professor Blalock,g. during the Spring '07 term at Cornell University (Engineering School).

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HW1_figures_ProblemSet - Question 1: Software...

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