Sparkling Water, Inc., sells 2 million bottles of drinking water each year. Each bottle sells at ($2.5)
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Sparkling Water, Inc., sells 2 million bottles of drinking water each year. Each bottle sells at \($2.5\) in real terms and costs per bottle are \($0.7\) in real terms. Sales income and costs occur at year-end. Sales income is expected to rise at a real rate of 7 percent annually, while real costs are expected to rise at 5 percent annually. The relevant, real discount rate is 10 percent. The corporate tax rate is 34 percent. What is Sparkling worth today?
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