asymmetry, the adverse selection problem, and why soft selling is a successful signal.
Individual Problem 19-6: You need to hire some new employees to staff your start-up venture. You know that potential employees are distributed throughout the population as follows, but you can’ t distinguish among them:
Employee Value Probability $ 50,000 0.25
$ 60,000 0.25 $ 70,000 0.25 $ 80,000 0.25 What is the expected value of five employees you hire? Salvatore ' s Chapter 15: a) Discussion Questions: 7. b) Problems: 8, 10, and spreadsheet problem 1. Discussion Question 7:
a) When can the NPV and the IRR methods of evaluating investment projects provide contradictory results?