The manager of a firm at $t=0$ has to decide whether to liquidate or to continue. If he decides to continue in $t=1,$ the value

of the firm assets will be $Va=140$ million assuming business recovers. Nevertheless, the most likely scenario

$85\%$ is that the company sales will continue declining. Then, company assets will be valued only at $V=78$ million. At

what debt value, we see an inefficiency case because Managers' Aversion to Liquidation.

a$.$ $$60$ million

b$.$ None

c$.$ $$100$ million

d$.$ $$80$ million

The correct answer is: $$100$ million

Please help me with this questions, explain each step. Thanks in advance$)))$