Imaging that you are operating a chain of GYMS in Valencia and you are looking at 2 (two) options to increase revenue across your GYM chain. The estimated impact of the 2 (two) options on result (*)...

Extracted text: Imaging that you are operating a chain of GYMS in Valencia and you are looking at 2 (two) options to increase revenue across your GYM chain. The estimated impact of the 2 (two) options on result (*) in year 1 and one-off associated costs of each option are given in the table below. Launch Loyalty Card € 100,000 Cut Prices € 150,000 Cost of option (one off cost) Probability of high GYM attendance Probability of low GYM attendance Result (*) of high GYM attendance 0.55 0.75 0.45 0.25 € 850,000 € 800,000 € 250,000 Result (*) of low GYM attendance € 250,000 In addition, you have been told by your accounting department that the cost of capital is 10%. Assume that costs of an option are incurred at the beginning of the year and results are achieved at the end of the year.