Formula for Problems

Offer W1 in year 1; W2 in year 2 only to those retainedW1 < W2 • Value of E-types applying = W1 + q•W2 + (1–q)•WE• Alternative for E-types = 2•WE • Value of D-types applying = W1 + (1-q)•W2 + q•WD• Alternative for D-types = 2•WD Lorne Roberts Corp. has invested a...

Formula for Problems

Offer W1 in year 1; W2 in year 2 only to those retainedW1 < W2 • Value of E-types applying = W1 + q•W2 + (1–q)•WE• Alternative for E-types = 2•WE • Value of D-types applying = W1 + (1-q)•W2 + q•WD• Alternative for D-types = 2•WD Lorne Roberts Corp. has invested a...