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Capital Budgeting Analysis: Expected NPV, Value of debt, equity

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Capital budgeting assignment: Calculate the expected value of the company's debt in one year with and without the expansion based on values in Excel spreadsheet. The answers are to go in the gray cells along with the formulas showing how the answer was derived.

Probability "Without expansion" "With expansion"

Recession 0.30 $11,000,000 $13,000,000
Normal 0.50 $17,500,000 $24,000,000
Expansion 0.20 $22,500,000 $28,500,000

Face value of debt $14,000,000
Cost of expansion $4,500,000

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This solution provides a capital budgeting assessment on the given information.

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Probability "Without expansion" "With expansion"

Recession 0.30 $11,000,000 $13,000,000
Normal 0.50 $17,500,000 $24,000,000
Expansion 0.20 $22,500,000 $28,500,000

Face value of debt ...

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