Economists at The Wells Corporation estimate that a good business environment and a bad business environment are equally likely for the coming year. The managers of Wells must choose between two mutually exclusive projects. Assume that the project Wells chooses will be the firms only activity and that the firm will close one year from today. Wells is obligated to make a $4,500 payment to bondholders at the end of the year. The projects have the same systematic risk, but different volatilities.

Consider the following information pertaining to the two projects:

Economy	Probability	Low Volatility Payoff	High Volatility Payoff
Bad	0.5	4290	3892
Good	0.5	5471	5962

What is the expected value of the firm if the low volatility project is undertaken? (Round answer to 0 decimal places. Do not round intermediate calculations)

What is the expected value of the firm if the high volatility project is undertaken? (Round answer to 0 decimal places. Do not round intermediate calculations)

What is the expected value of the firms equity if the low volatility project is undertaken? (Round answer to 0 decimal places. Do not round intermediate calculations)

What is the expected value of the firms equity if the high volatility project is undertaken? (Round answer to 0 decimal places. Do not round intermediate calculations)

*This is an indirect agency cost issue. Note which project adds the most value to the firm vs. which project is more likely to be undertaken by the firms equity holders.