Consider a project with free cash flows in one year of $$138,800($weak economy$)$ or $$176,900($strong economy$),$ with each outcome being equally likely. The initial investment required for the project is $$93,200,$ and the project's cost of capital is $16\%.$ The risk$-$free interest rate is $7\%.$

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 $$93,200$ is instead raised by borrowing at the risk$-$free interest rate. What are the cash flows of the levered equity, what is its initial value and what is the initial equity according to MM$?$

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

The NPV of this project 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 initifil market value of the unlevered equity is $ $($Round to the nearest dollar.$)$

c$.$ Suppose the initial $$93,200$ is instead raised by borrowing at the risk$-$free interest rate. What are the cash flows of the levered equity, what is its initial value and what is the initial equity according to MM$?$

Enter the cash flows of the levered equity and its initial values into the following table: $($Round to the nearest dollar.$)$

$\backslash$table$[[,$Date $0,$Date $1],[,$Initial Value,Cash Flow Strong Economy,Cash Flow Weak Economy$],[$Debt$,$$$93,200,$$$,],[$Levered Equity,$$,$$$,]]$