Pico Brewing's operating earnings plus its market value at the end of the year (i.e. t=1) equal to either $120 million in a weak market or $350 in a strong market. The firm's total debt obligation of principal and interest is $120 million and is due at the end of the year. According to the predictions generated by a machine learning model, there is a 55% chance for a weak market and a 45% chance for a strong market. Assume that the required rate of return on both debt and equity at Pico Brewing is 11%. The company is considering making a new model of home brewing machine that is expected to generate a cash flow of -$101 million in a weak market and $89 million in a strong market at the end of the year. Assume that the project doesn't require initial investment. a. What is the NPV of the home brewing machine project? Should the shareholder undertake the project? [5 points] b. Will the shareholder undertake the project? Provide numerical support to the decision. [15 points] What will be the firm value if the project is taken? [15 points] C. Pico Brewing's operating earnings plus its market value at the end of the year (i.e. t=1) equal to either $120 million in a weak market or $350 in a strong market. The firm's total debt obligation of principal and interest is $120 million and is due at the end of the year. According to the predictions generated by a machine learning model, there is a 55% chance for a weak market and a 45% chance for a strong market. Assume that the required rate of return on both debt and equity at Pico Brewing is 11%. The company is considering making a new model of home brewing machine that is expected to generate a cash flow of -$101 million in a weak market and $89 million in a strong market at the end of the year. Assume that the project doesn't require initial investment. a. What is the NPV of the home brewing machine project? Should the shareholder undertake the project? [5 points] b. Will the shareholder undertake the project? Provide numerical support to the decision. [15 points] What will be the firm value if the project is taken? [15 points] C