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An investment of $40,00 in Marigold's Bank is expected to payoff greatly- but not equally-in each of the next 5 years. The company excepts a
An investment of $40,00 in Marigold's Bank is expected to payoff greatly- but not equally-in each of the next 5 years. The company excepts a small increase in operating income in the year 1 of $5,000, but then steadily larger improvements in profitability in year 2-5: $10,250, $20,250. $18,875, and $26,125, respectively. The year prior to this statement, the company's ARR was 9% and its tax rate was 20%.. What level of ARR does this projection provide? Is it likely that the company will move forward with the investment.
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