Question 4 (20 Marks] Suppose a firm is currently in financial distress and has a loan of $2,000,000 due at the end of the year, however the market value of their assets at the end of the year is expected to be $1,500,000 which will result in a default on their debt. In an effort to overcome the anticipated financial distress, the firm is considering a project that requires an initial investment of $300,000 and will generate a guaranteed return of 70% over the next year. As the firm does not have the cash on hand to fund this investment and given the current and impending financial distress, the firm can only finance this project with equity. Assuming the risk-free rate is 4% and given this information: A. What is the NPV of this project? (4 marks) B. From the firm's perspective, should they invest in this project? (2 marks) C. From the equity-holders' perspective, should they invest in this project? (6 marks) D. Explain why the answers to B and C are the same or different. What is this type of distorted decision-making called (explain briefly in one or two sentences)? (3 marks) E. What would be the break-even guaranteed return on the project for the equity-holders to justify the project (5 Marks)? (3 marks) F. In this example you are not given the interest rate on the loan. If we told you the interest rate on the loan was 7%, what discount rate would you use in your calculations? (2 marks)