5. Consider a firm with the following financial characteristics: Book Market Liabilities and Book Market Assets Value Value Equity Value Value Cash $ 1,000 $1,000 Long-term Bonds $ 1,500 $ 1,500 Fixed Assets 2,000 500 Equity 1,500 Total $ 3,000 1,500 Total $ 3,000 $ 1,500 A. Assuming the firm is liquidated today, how much do the long-term bondholders and shareholders receive? (5 points) u B. Consider a very risky project the firm can undertake with the below payoffs and probabilities. Assume the cost of the investment is $1,000 and the required return is 30%, what is the NPV of the project? What is the payoff to bondholders and shareholders in the case where the project is successful AND in the case where the project is unsuccessful? (10 points) The Gamble Probability Payoff Successful Project 10% $ 10,000 Unsuccessful Project 90% C. The firm also has the ability to undertake a project sponsored by the US government. The cost of the ject is $2,000 and the guaranteed return is $2,500. The firm has a required rate of return of 5%. If the decision is made by the equity holders, should the firm undertake the project? Why or why not? (Show calculations/payouts to bondholders and shareholders.) (10 points)