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Facebook, Inc. is considering two investment options: Option A: Initial investment of $50 million, expected cash flows of $20 million per year for 5 years.

Facebook, Inc. is considering two investment options:

    • Option A: Initial investment of $50 million, expected cash flows of $20 million per year for 5 years.
    • Option B: Initial investment of $80 million, expected cash flows of $25 million per year for 5 years.

Perform a scenario analysis by calculating the net present value (NPV) of both options using discount rates of 8%, 10%, and 12%. Recommend the preferred investment option based on the scenario analysis.

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