Question: QUESTION 15 Use the information for the question(s) below. Consider a project with free cash flows in one year of $90,000 in a weak economy

QUESTION 15 Use the information for the question(s) below. Consider a project with free cash flows in one year of $90,000 in a weak economy or $117,000 in a strong economy, with each outcome being equally likely. The initial investment required for the project is $80,000, and the project's cost of capital is 15%. The risk-free interest rate is 5%. 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. The market value of the unlevered equity for this project is closest to: $94,100. $98,600. $90,000. $86,250
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