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Kansas Food Stores is planning to sell its Topeka, Great Bend, and Newton stores. The firm expects to sell each of the three stores for
Kansas Food Stores is planning to sell its Topeka, Great Bend, and Newton stores. The firm expects to sell each of the three stores for the same, positive cash flow of $ F. The firm expects to sell its Topeka store in Z years, its Great Bend store in Z years, and its Newton store in N years. The cost of capital for the Topeka and Great Bend stores is J percent and the cost of capital for the Newton store is M percent. We know that Z>N>0 and J>M>0. The cash flows from the sales are the only cash flows associated with the various stores. Based on the information in the preceding paragraph, which one of the following assertions is true? The Newton store is the most valuable of the 3 stores The Topeka store is the most valuable of the 3 stores Two of the three stores have equal value and those two stores are more kaluable than the third store or all three stores have the same value The Great Bend store is the most valuable of the 3 stores Cannot be determined based on the information given
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