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Question: Burleigh Tech has developed an optioned strategy to compete in a new software market. Its new software package is a security product that identifies a cyber-attacker entering a network and responds to the attack with a counterattack on the hacker's system. The counterattack is designed to disable the attacker's PC. Burleigh has named its system Seeker. Currently, Seeker is in a beta version, and Burleigh is awaiting legal clearances before Seeker can be released. There are three to four other high-tech firms developing similar counterattack software. Burleigh has invested $250,000 in developmental costs for the software, and the company is positioned to be the first high-tech firm to release such a package. Burleigh's lawyers have estimated there is a 75 percent probability that legal issues will be settled after one year.
At that time, Burleigh can invest another $500,000 into the development and release a commercial version of Seeker. Assuming all legal hurdles are overcome and the software is released, Burleigh estimates it has a 50-50 chance of earning either $1,000,000 or $4,000,000 in profits during the first-year Seeker is sold. On Thanksgiving Day, Melvin Poluce, one of Burleigh's programmers, came into the office and stole the coding for the
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