Consider a project with free cash flows in one year of $$123,800$ or $$174,900,$ with each outcome being equally likely. The initial investment required for the project is $$90,700,$ and the project's cost of capital is $19\%.$ The risk$-$free interest rate is $5\%.$

a$.$ What is the NPV of this project?

b$.$ Suppose that to raise the funds for the initial investment, the project is sold to investors as an all$-$equity firm. The equity holders will receive the cash flows of the project in one year. How much money can be raised in this way$-$that is$,$ what is the initial market value of the unlevered equity?

c$.$ Suppose the initial $$90,700$ is instead raised by borrowing at the risk$-$free interest rate. What are the cash flows of the levered equity, what is its initial value and what is the initial equity according to MM$?$

a$.$ What is the NPV of this project?

The NPV of this project is $$34804.($Round to the nearest dollar.$)$

b$.$ Suppose that to raise the funds for the initial investment, the project is sold to investors as an all$-$equity firm. The equity holders will receive the cash flows of the project in one year. How much money can be raised in this way$-$that is$,$ what is the initial market value of the unlevered equity?

The initial market value of the unlevered equity is $

$($Round to the nearest dollar.$)$

c$.$ Suppose the initial $$90,700$ is instead raised by borrowing at the risk$-$free interest rate. What are the cash flows of the levered equity, what is its initial value and what is the initial equity according to MM$?$

Enter the cash flows of the levered equity and its initial values into the following table: $($Round to the nearest dollar.$)$

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Date $1$

$\backslash$table$[[,$Initial Value,Cash Flow Strong Economy,Cash Flow Weak Economy$],[,$$$90,700,$$$95,235,$$$95,235$