S-a) 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%. What is the project's NPV? 5-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. What is the market value of the unlevered equity for this project? 5-c) Suppose that to raise the funds for the initial investment the firm borrows $80,000 at the risk-free rate, what is the cash flow that equity holders will receive in one year in a weak economy? 5-d) Suppose that to raise the funds for the initial investment the firm borrows $80,000 at the risk-free rate, (according to MM I) what is the value of the firm's levered equity from the project? 5-e) Suppose that to raise the funds for the initial investment the firm borrows $80,000 at the risk- free rate, what is the cost of capital for the firm's levered equity? S-a) 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%. What is the project's NPV? 5-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. What is the market value of the unlevered equity for this project? 5-c) Suppose that to raise the funds for the initial investment the firm borrows $80,000 at the risk-free rate, what is the cash flow that equity holders will receive in one year in a weak economy? 5-d) Suppose that to raise the funds for the initial investment the firm borrows $80,000 at the risk-free rate, (according to MM I) what is the value of the firm's levered equity from the project? 5-e) Suppose that to raise the funds for the initial investment the firm borrows $80,000 at the risk- free rate, what is the cost of capital for the firm's levered equity