1) Agency Problem: Assume that a project costs $5 million to implement. With 20% probability, the project will be worth $18 million. With 80%...

1) Agency Problem: Assume that a project costs $5 million to implement. With 20% probability, the project will be worth $18 million. With 80% probability, the project will be worthless. For simplicity, assume that there is no time value of money here (or, alternatively, that the discount rate is zero). 

b) Now, also assume that the manager would receive a private benefit (such as memberships, travel, prestige, perquisites, etc.) in an amount that is worth $100,000 to him/her. Assume that the manager is not at risk to lose his/her job and owns no stock in the company. Would the manager accept or reject the project? 

*please show work!