QUESTION 1

1. "An auto-parts company is deciding whether to sponsor a racing team for a cost of $5000000. The sponsorship would last for 3 years and is expected to increase cash flows by $2000000 per year. If the discount rate is 5%, 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

1. "The owners of a chain of fast-food restaurants spend $25000000 installing donut makers in all their restaurants. This is expected to increase cash flows by $9000000 per year for the next 3 years. The discount rate is 2.5%. 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 answer."

QUESTION 3

1. "Consider a project with the cash flow as depicted in the following table. The discount rate for this project is 7.5%. The net present value (NPV) is ________."" Note: Express your answers in strictly numerical terms. For example, if the answer is $500, write enter 500 as an answer."

   Year	Cash Flow
   0	-25,000
   1	10,000
   2	7,000
   3	7,000
   4	7,000