Your firm consists of $1,000 in cash. You have two potential investment opportunities, both cost $1,000 today. Project 1 pays $2,200 at the end of the year with 50% probability and $0 with 50% probability. Project 2 pays $10,000 at the end of the year with 10% probability and $0 with 90% probability. Assume the discount rate is 0%. Assume that you also have a debt contract whereby you owe $X to a debtholder at the end of the year. The contract specifies that you cannot pay dividends until after he is repaid. You have no other liabilities. What is largest debt payment for which you would prefer to the first project? None of the above $150 $325 $250