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By opening one store, the firm knows that the probability of high demand is 50%. The potential value gain to expand next year is thus 50%*(10M-8M)/1.1 = 0.91M. The value to open one store this year is 7.5M - 8M = -0.5.

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Financial economics is the branch of economics characterized by a "concentration on monetary activities", in which "money of one type or another is likely to appear on both sides of a trade".

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