Use the information below answer questions 1-3: Management is considering five different projects (Alpha, Beta, Delta, Gamma, Theta) There are no cash flows to consider besides the initial cash outlay and the payoff All payoffs are expected in two years Project Alpha Beta Delta Gamma Theta Probabilty [Failure] 80% 60% 50% 50% 40% 20% Payoff [Success] Payoff [Failure] $ 320 $ 280 $ $ 280 $ 200 $ $ $ 400 $ 190 $ $ 150 $ 140 $ $ 150 $ 120$ Initial Outlay (200) (200) (200) (100) (100) Management's primary objective is to maximize NPV Management can pursue multiple projects as long as the creditor is willing to make the loan The creditor will not allow management to pursue any project, or combination of projects, that put the creditor's principle at risk The creditor offers the company $200M today and expects no payments over the next 24 months, but does expect $242M to be repaid in full at the end of year two 3. As a consultant, which project(s) would you advise the company to pursue: a. Alpha b. Delta c. Gamma d. Theta e. Gamma and Theta Which of the following is least likely to be specified in a corporate bond's indenture: a. Face Value b. Coupon Rate c. Yield To Maturity d. Payment Frequency e. Protective Covenants