Q: What is the present value of Beam's financial distress cost?

Beam Co. plans to enter the Australian market next year. Depending upon the success of its Australian expansion, Beam will have a value of either $120 million or $200 million, with each outcome being equally likely. The cash flows are unrelated to the state of the economy (i.e. risk from the project is diversifiable) so that the project has a beta of 0 and the risk-free rate is currently 5%. Assume that in the event of default, 25% of the value of Beam's assets will be lost in bankruptcy costs and suppose that Beam has zero-coupon debt with a $160 million face value due next year