Elbit Company is considering an investment project that generates a cash flow of $1,720,000 next year if the economy is favorable but generates only $730,000 if the economy is unfavorable. The probability of favorable economy is 60% and of unfavorable economy is 40%. The project will last only one year and be closed after that. The cost of investment is $1,300,000 and Elbit plans to finance the project with $450,000 of equity and $850,000 of debt. Assuming the discount rates of both equity and debt are 0%. What is the expected cash flow to Elbit s shareholders if the company invests in the project?

		$0
		$475,000
		$522,000
		$710,000
		$870,000