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Consider a project with free cash flows in one year of $100,000, $125,000, or $200,000 with 25%, 50%, and 25% probability of occurring, respectively. The

Consider a project with free cash flows in one year of $100,000, $125,000, or $200,000 with 25%, 50%, and 25% probability of occurring, respectively. The initial investment required for the project is $100,000 and the project's cost of capital is 10%. Determine if the project should be pursued. The risk-free interest rate is 5%.

Suppose that to pursue the project, the firm borrows $50,000 at the risk-free interest rate and issues equity. What are the cash flows that the (levered) equity holders will receive if the realized outcome is the boom scenario ($200,000).

(Insert your answer in dollars with no punctuation or $signs.)

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