Inc. has assets worth $25.92 billion and debt that has a market value of $22.5 billion. The firm is in thee awkward position of needing to pay-off all of its debt at the end of thee quarter. Management has become aware of a project that has a payoff of either $0 (with a probability of 80%) or $30 billion. Thee cost of the project is $7 billion.

a.) what is the projects NPV?

b.) what is the expected value of the firms equity with the project? what is the expected value of the firms debt with the project?

c.) would equity holders recommend that management take the project?