Zero Point Hedge Fund has $250 in wealth and is considering an investment project that requires an upfront $150 investment. With the project, Zero must choose either safe or risky. If Zero picks safe, the project generates revenue $160 with prob. 0.95 & revenue $75 otherwise. If Zero picks risky, the project generates $190 with prob. 0.77 & $0 otherwise. Any wealth that Zero doesn't allocate to the project earns a risk free 0%.

(a.) If Zero uses its own wealth to fund the project, what is the expected payoff from choosing safe, and the exp. payoff from risky?

(b.) If Zero finances the entire investment using a 0% loan, and is liable for repayment only from project cash flow (limited liability), what are the exp. payoffs from safe and risky?

(c.) Now the lender obligates Zero to fund part of the project using its own capital. What is the minimum capital amount necessary (along with a 0% loan to cover the rest) in order to ensure that Zero prefers the safe choice over the risk choice?