matthod.com student/PlayerTestaspxntestid 15a 2215408 centerwin FINC600 (1) Quiz Week 5 Quiz is Question: 1 pt 2 of 5 (4 complete) This Quiz: 5 pts poss Consider an entrepreneur with the following opportunity For an initial investment of S800 this year, a project wilgenerate cash fows of.Nher $1.400 next yea or S900 next year. The cash sows depend on whether the investment to invest in this project. Given the market risk of the investment, the appropriate risk premium is 10% The entrepreneur decides to raise part ofthe intialcaptalusing debt suppose she undsthe project by bonowing S7s0 addition equity. The debt is b. According to MM I is the value of the levered equity? What are its cash fows ir the economy is strong? What are its cash fous ifthe economy is weak? What is the return on equity for the ed and the levered investment? What is its e return for the levered and the What is the risk premium of the and the levered is the sensitivity of the and levered equily return tosytematic How does elevered sensa compare d. What is the equity return to systematic risk? How does its levered premium compare to the unevered risk premium? e. What is debt-equity ratio of the investment in the levered case? WACCin the levered case? a. According to MM Proposition what is the value of the leveredequit? What are cash nows the economy isstrong'What re as cashfows economy is According to MM Proposition l the value of the ed equity is s (Round to the nearest cent) 200 the economy is strong the cash flows are S1400 (Round to the nearest oent) Mthe economy is weak the cash flows are s900 (Round to the nearest cent) lb. What is the return on equity for the unlevered and levered investment? What is expected rehumforthe levered and mesament? Enter your answer in each of the answer boxes e ts O Type here to search