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An auto-parts company is deciding whether to sponsor a racing team for a cost of $1 million. The sponsorship would last for three years and
An auto-parts company is deciding whether to sponsor a racing team for a cost of $1 million. The sponsorship would last for three years and is expected to increase cash flows by $590,000 per year. If the discount rate is 7.9%, what will be the change in the value of the company if it chooses to go ahead with the sponsorship? A. $889,499 B. $784,852 C. $837,176 D. $523,235
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