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QUESTION 1 An auto-parts company is deciding whether to sponsor a racing team for a cost of $500000. The sponsorship would last for 5 years
QUESTION 1 "An auto-parts company is deciding whether to sponsor a racing team for a cost of $500000. The sponsorship would last for 5 years and is expected to increase cash flows by $40000 per year. If the discount rate is 8.8%, what will be the change in the value of the company if it chooses to go ahead with the sponsorship? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, write enter 500 as an answer." QUESTION 2 "The owners of a chain of fast-food restaurants spend $500000 installing donut makers in all their restaurants. This is expected to increase cash flows by $150000 per year for the next 6 years. The discount rate is 8%. What is the net present value of installing the donut makers?"" Note: Express your answers in strictly numerical terms. For example, if the answer is $500, write enter 500 as an
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