(Solved by Humans)-Zeta Computing Services Ltd has recently produced some software for a client organization.

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Zeta Computing Services Ltd has recently produced some software for a client organization. The software has a life of two years and will then become obsolete. The cost of producing the software was £10,000. The client has agreed to pay a license fee of £8,000 a year for the software if it is used in only one of its two divisions, and £12,000 a year if it is used in both of its divisions. The client may use the software for either one or two years in either division but will definitely use it in at least one division in each of the two years. Zeta believes there is a 0.6 chance that the licensee fee received in any one year will be £8,000 and a 0.4 chance that it will be £12,000. There are, therefore, four possible outcomes attached to this project (where p denotes probability):Outcome 1. Year 1 cash flow £8,000 (p = 0.6) and Year 2 cash flow £8,000 (p = 0.6). The probability of both years having cash flows of £8,000 will be0.6 × 0.6 = 0.36  Outcome 2. Year 1 cash flow £12,000 (p = 0.4) and Year 2 cash flow £12,000 (p = 0.4). The probability of both years having cash flows of £12,000 will be 0.4 × 0.4 = 0.16 Outcome 3. Year 1 cash flow £12,000 (p = 0.4) and Year 2 cash flow £8,000 (p = 0.6). The probability of this sequence of cash flows occurring will be 0.4 × 0.6 = 0.24  Outcome 4. Year 1 cash flow £8,000 (p = 0.6) and Year 2 cash flow £12,000 (p = 0.4). The probability of this sequence of cash flows occurring will be 0.6 × 0.4 = 0.24