How do you compute expected return for two projects?

Case: Choose between two TV projects under uncertainty

You are evaluating two projects:

• Project A: "Analyst" (an existing TV show you can continue investing in)
• Project B: "Shark Bank" (a new project)

Part A — Expected return

For each project you are given (or can request) a set of possible outcomes (e.g., success, moderate success, failure) and their associated profits/cash flows.

1. What information must you ask for to compute expected return (especially for "Shark Bank")?
2. How do you compute and compare the expected return (or NPV) of the two projects?
3. After computing, which project would you pick and why?

Part B — Selling decision with numbers

Assume the remaining economic life of "Analyst" is 2 years.

• If you sell the "Analyst" project today, you expect to lose 1.5 million subscribers .
• Each lost subscriber corresponds to $32 USD of contribution (assume this is the total contribution you would have earned per subscriber over the relevant horizon; state any alternative assumption if you choose).
• "Shark Bank" will generate $22M total profit in 2 years (assume this is already net of costs).

A competitor offers you $51M today to buy the "Analyst" project.

1. Show how you would decide whether to sell, using an NPV/expected value framework.
2. Besides the numeric comparison, list key strategic considerations that could change the decision.

Deliverable: Provide formulas, a clear decision rule, and key assumptions (probabilities, discount rate, risk).