Assume a firm has cash of $10 and a project (Project A) that is either worth $130 or $80 (50% chance of each). The firm owes $110 to the bank. Similar to the example in class, the following shows the value of assets, debt, and equity where the amounts are calculated based on the good state, the bad state, and on expected values. Base case market value balance sheet in the good state (50% chance) Cash $10 Debt Project A $130 Equity Total $140 Total $110 $30 $140 Base case market value balance sheet in the bad state (50% chance) Cash $10 Debt Project A $80 Equity Total $90 Total $90 $0 $90 Base case market value balance sheet based on expected values Cash $10 Project A $105 Total $115 Debt Equity Total $100 $15 $115 Now assume the firm is considering a new project (Project B) which requires an initial investment of $5. If the new project is accepted, the $5 will be paid for using the firm's cash. Project B has a $10 cash flow in the good state and a -$10 cash flow In the bad state. What is the expected value of the firm's equity if the firm decides to accept Project B? Refer back to the facts in the previous problem. What is the expected value of the firm's debt if the firm decides to accept Project B