QUESTION 1

An auto-parts company is deciding whether to sponsor a racing team for a cost of $4447262. The sponsorshipwould last for 10 years and is expected to have cash flows by $513901 per year. If the discount rate is 11.85%, what willbe the change in the value of the company if it chooses to go ahead with the sponsorship?

QUESTION 2

If a company has an interest rate of 12.86%. Compute the NPV for the following Cash Flows:

CashFlows	Amount
Cash Flows at 0	-243
Cash Flows at 1	99
Cash Flows at 2	156
Cash Flows at 3	0
Cash Flows at 4	69