Question
1. An auto-parts company is deciding whether to sponsor a racing team for a cost of $2,628,651. The sponsorshipwould last for 9 years and is
1. An auto-parts company is deciding whether to sponsor a racing team for a cost of $2,628,651. The sponsorshipwould last for 9 years and is expected to have cash flows by $585,899 per year. If the discount rate is 9.65%, what willbe the change in the value of the company if it chooses to go ahead with the sponsorship?
2. If a company has an interest rate of 13.96%. Compute the NPV for the following Cash Flows: CashFlows Amount Cash Flows at 0 242 Cash Flows at 1 87 Cash Flows at 2 169 Cash Flows at 3 0 Cash Flows at 4 46
3. Project A requires you an upfront payment of $226,131 and yearly payments of $48,726 for 14 years. Your cost of capital is 4.31%,
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