thisisbrianly

irrespective of whether you fail or succeed - you invest the 1 Million.

2 ways of looking at this.

NPV on success ->
0.5202 * [5/1.1^4 - 1]

NPV on Failure:
0.4898 * [0 - 1] <-- 0 payoff, 1 invested.

sum of the two above.

= 0.5202 * 5/1.1^4 -1 [0.5202+0.4898] ==> same as -1*1

or the way I have done it above... which is equivalent. You invest the 1 Mill. regardless of success or failure.

CP