Sam Mc Kenzy is a founder and CEO of McKenzy Restaurants Inc., a regional company. Sam is considering opening several new restaurants. Sally Thorton, the company CFO has been put in charge of the capital budgeting analysis. She has examined the potential for the company€™s expansion and determined that the success of the new restaurants will depend critically on the state of the economy next few years.
McKenzy currently has bond issue outstanding with a face value of $25 million that is due in one year. Covenants associated with this bond issue prohibit the issuance of any additional debt. This restriction means that the expansion will be entirely financed with equity, at a cost of $9 million. Sally has to summarize her analysis in the following table, which shows the value of the company in each state of the economy next year, both with and without expansion. 

1) What is the expected value of the company in one year, with and with out expansion?
2) What is the expected value of the companies debt in one year, with and with out theexpansion?

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Economic Growth Low Normal Hi Probability -30 50 20 ith out Expansion ith Expansion S20 mill $24 mill S41 mill $24 mill S45 mill S53 mill