Consider a project with free cash flow in one year of $$139,357$ or $$193,293,$ with either

outcome being equally likely. The initial investment required for the project is $$105,000,$ and

the project's cost of capital is $21\%.$ 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 $$105,000$ 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 $$.($Round to the nearest dollar.$)$

PLEASE ANSWER A$,$B$,$C