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Question 3 33 points Save Answer As a Business analyst at Silicon Electronics, Inc, you...

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Question 3 33 points Save Answer As a Business analyst at Silicon Electronics, Inc, you are evaluating an option to purchase an equipment to expand the product line to make computer chips for the company There are two machines meeting the company's Investment criteria Machine A and Machine B Machine A costs more than Machine B but has the sexibility to be modified if the demand for computer chips is low while machine cannot be modified. The following is the financial Information about these two machines The project with Machine B is worth $100 million today and will be $120 million one year from today with high demand and 590 million with low demand. Machine A can be modified and sold off for $100 million if the demand for computer chip is low. (Assume 5% of interest rate) What is the risk neutral probability of up movement How much more would you be willing to pay for Machine A than Machine B 7(example of answer format 15.50%) ? (example of answer format $13.50 milion or $13,500,000)

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