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An auto-parts company is deciding whether to sponsor a racing team for a cost of $500000. The sponsorship would last for 5 years and is
An auto-parts company is deciding whether to sponsor a racing team for a cost of $500000. The sponsorship would last for 5 years and is expected to increase cash flows by $40000 per year. If the discount rate is 8.8%, what will be the change in the value of the company if it chooses to go ahead with the sponsorship? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, write enter 500 as an answer."
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