14. A firm has debt with a face value of 50 and has assets in place that will generate next period 20 in the bad state and 100 in the good state. The firm is able to take on a new project that costs 10 and will generate the payoffs according to the following table: Existing Project 20 New Project 100 18 Assume that to finance the $10 for the new project, the firm can only raise by issuing a new senior debt with face value of 10, (Throughout this question assume 0%discountrate). (Hint: financing the project creates 3 classes of claims: senior debt, existingjunior debt, and equity. Issuing senior debt initially injects $10 to the firm, the question is whether the firm ought to raise the $10 and then "substitute" it for the project). 1. What is the project's NPV? 2. (0) What is the equity value if the firm does not undertake the new project? () What is the existing debt value if the firm does not undertake the new project? 3. (0) What is the equity value if the firm does undertake the new project? (ii) What is the existing debt value if the firm does undertake the new project? 4. Should the firm undertake the project if her goal is to maximize firm value? Will the manager, operating on behalf of the shareholders, undertake the project