Consider a project with free cash flow in one year of $$139,138$ or $$187,005,$ with either outcome being equally likely. The initial investment required for the project is $$110,000,$ and the project's cost

of capital is $23\%.$ The risk$-$free interest rate is $7\%.($Assume no taxes or distress costs.$)$

a$.$ What is the NPV of this project?

b$.$ Suppose that to raise the funds for the initial investment, the project is sold to investors as an all$-$equity firm. The equity holders will receive the cash flows of the project in one year. How much

money can be raised in this way$-$that is$,$ what is the initial market value of the unlevered equity?

c$.$ Suppose the initial $$110,000$ is instead raised by borrowing at the risk$-$free interest rate. What are the cash flows of the levered equity, and what is its initial value according to M&M$?$

a$.$ What is the NPV of this project?

The $NPV$ is $

$($Round to the nearest dollar.$)$

b$.$ Suppose that to raise the funds for the initial investment, the project is sold to investors as an all$-$equity firm. The equity holders will receive the cash flows of the project in one year. How much

money can be raised in this way$-$that is$,$ what is the initial market value of the unlevered equity?

The initial market value of the unlevered equity is $$,.($Round to the nearest dollar.$)$

c$.$ Suppose the initial $$110,000$ is instead raised by borrowing at the risk$-$free interest rate. What are the cash flows of the levered equity, and what is its initial value according to

The cash flows of the levered equity and the initial market value of the levered equity according to M&M is: $($Round to the nearest dollar.$)$