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P 17-17 (similar to) Question Help AMS Company has unexpectedly generated a one time extra $5 million in cash flow this year Alter announcing the

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P 17-17 (similar to) Question Help AMS Company has unexpectedly generated a one time extra $5 million in cash flow this year Alter announcing the extra cash flow, AMS stock pnce was $50 por share it has 1 million shares outstanding). The managers are considering spending the $5 million on a project that would generate a single cash flow of $55 million one year, which they would then use to repurchase shares. Assume the cost of capital for the project is 15% a. If they decide on the investment, what will happen to the price per share? b. If they instead use the $5 million to repurchase stock immediately, what will be the price per share? c. Which decision is better and why? a If they decide on the investment, the price per share will be $ (Round to the nearest cent)

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