Zymase is a biotechnology startup firm. Researchers at Zymase must choose one of three different research strategies. The payoffs (after-tax) and their likelihood for each strategy are shown below. The risk of each project is diversifiable.

Strategy	Probability	Payoff ($million)
A	100%	75
B	50%	130
	50%	0
c	10%	310
	90%	30

a.Which project has the highest expected payoff?

b. Suppose Zymase has debt of $30 million due at the time of the project's payoff. Which project has the highest expected payoff for equity holders?

c. Suppose Zymase has debt of $110 million due at the time of the project's payoff. Which project has the highest expected payoff for equity holders?

d. If management chooses the strategy that maximizes the payoff to equity holders, what is the expected agency cost to the firm from having $30 million in debt due? What is the expected agency cost to the firm from having $110 million in debt due?

a.Which project has the highest expected payoff?

The project with the highest expected payoff is: (Select the best choice below.)

A. Project A

B. Project B

c. Project C

b. Suppose Zymase has debt of$30 million due at the time ofthe project's payoff. Which project has the highest expected payoff for equity holders?

If Zymase has debt of $30 million due at the time of the project's payoff; the project with the highest expected payoff for equity holders is: (Select the best choice below.)

A. Project A

B. Project B

c. Project C

c. Suppose Zymase has debt ofS110 million due at the time of the project's payoff. Which project has the highest expected payoff for equity holders?

If Zymase has debt of S110 million due at the time of the project's payoff, the project with the highest expected payoff for equity holders is: (Select the best choice below.)

A. Project A

B. Project B

C. Project C

d. If management chooses the strategy that maximizes the payoff to equity holders, what is the expected agency cost to the firm from having S30 million in debt due? What is the expected agency cost to the firm from having Sl10 million in debt due?

If management chooses the strategy that maximizes the payoff to equity holders, the expected agency cost to the firm from having s3o million in debt due is $__ million. (Round to the

nearest integer.)

The expected agency cost to the firm from having S110 million in debt due is $__ million. (Round to the nearest integer.)