Your firm is considering a new investment project that costs $1,000K. There are two states of the world that will determine the values of your existing assets and new investment project. As the manager, assume your objective is to maximize the value to current shareholders. The following table provides you with financial information for your firm in each state of the world (all values are in thousands of $):

	State G	State B
Probability of State	50%	50%
Present Value of Existing Assets	8,000	4,000
Cost of New Investment	1,000	1,000
Present Value of New Investment	2,500	1,500
NPV of New Investment	1,500	500
Value of Assets with Investment	10,500	5,500

In the next two questions, the NPV of mispricing equals the cash received from selling the equity ($1,000K) minus the value of that equity. The value of the equity that was sold is calculated as the percentage of the firm that was sold multiplied by value of the assets (with the new investment) in that state.

c) What is the APV of the new investment project (NPV of the new investment plus the NPV of financing) if the manager knows that the true state of the world is State B?