3) Managerial Incentives Consider a firm financed with an initial investment of $100 million in February 2006. In exactly one year it must decide whether to go ahead with a project that requires an additional $100 million investment. The present values (as of February 2007) of the firm's payoffs from taking or not taking the additional investment in the three future states of the economy are given as follows. This problem is from the book by Grinblatt and Titman, Financial Markets and Corporate Strategy, p. 641. a) What is the NPV of the project in each of the states as of February 2007 ? b) When financing the investment in February 2006, the original entrepreneurs believe that the manager they hire will want to fund the new investment in February 2007 even if it has a negative NPV. Why might they be concerned about this? c) Is there a way that the initial entrepreneurs can finance the original investment in February 2006 to ensure that the firm can raise sufficient funds only when the additional investment has a positive NPV at the end of year 1