Bedrock Company has $70 million in debt and $30 million in equity. The debt matures in 1 year and has a 10%interest rate, so the company is promising to pay back $77 million to its

debtholders 1 year from now. The company is considering two possible investments, each of which will require an up-front cost of $100million.Each investment will last for 1 year, and the payoff from each investment depends on the strength of the overall economy. There is a 50% chance that the economy will be weak and 50% chance that it will be strong. Here are the expected payoffs (all dollars are in millions) from the two investments: