Assume Your Current Projects Will Return $560 Tomorrow Although Your

Assume your current projects will return $560 tomorrow although your investors believe they will return only $300. A new project will cost $600 and will return $800 tomorrow, but your
Investors believe it will return only $700. If you have no cash and can use only equity
Financing, what will the value of the combined firm be to the existing shareholders if the new
Project is undertaken?

A) $ 544
B) $1,000
C) $ 760
D) None of the above answers is correct.