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# ATC has a value of \$98,000 in a normal economy and \$87,000 in a recession. The firm has \$90,000 of debt. The probability of a recession is 18 percent....

ATC has a value of \$98,000 in a normal economy and \$87,000 in a recession. The firm has \$90,000 of debt. The probability of a recession is 18 percent. The firm is considering a project that would change the firm values to \$105,000 in a good economy and \$92,000 in a recession. If the firm accepts this project, the firm value will ______ and shareholder value will ______.

Multiple Choice

• decrease by \$2,000; decrease by \$1,000
• increase by \$2,000; increase by \$2,000
• increase by \$6,640; increase by \$6,100
• increase by \$12,000; increase by \$12,000
• increase by \$6,640; increase by \$6,640

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