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2. You work in a company that sells furniture. The company is considering a new marketing campaign. The marketing campaign cost is $1M to be
2. You work in a company that sells furniture. The company is considering a new marketing campaign. The marketing campaign cost is $1M to be paid immediately. You expect that as a result of the campaign, the company will increase its market share and will generate addition annual cash flows for $150,000 forever, starting 1 year from now. (6 points) a. If your company's cost of capital (the discount rate) is 10% should it undertake the marketing campaign? Explain. b. What is the marketing campaign's IRR? c. Should you undertake the marketing campaign? Use an IF statement to reach the conclusion. \begin{tabular}{|l|l|} \hline 1 & Marketing cam \\ \hline 2 & Marketing campaign cost \\ \hline 3 & Increase in annual cash-flows \\ \hline 4 & Discount rate \\ \hline 5 & \\ \hline 6 & \\ \hline 7 & \\ \hline 8 & \\ \hline 9 & \\ \hline 10 \\ \hline 11 \\ \hline 12 \\ \hline 13 \\ \hline 14 \\ \hline 15 & \\ \hline \end{tabular}
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