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Question 13 (2 points) Going Places Motor Company very recently undertook an aggressive marketing campaign to improve its market share. The company plans to spend
Question 13 (2 points) Going Places Motor Company very recently undertook an aggressive marketing campaign to improve its market share. The company plans to spend $25,000.00 next year, $37,500.00 in year two and $65,000.00 in year three of the campaign. This is expected to increase earnings (not including the cost of the campaign) by $2,500.00 in year one, $10,000.00 in year two and $22,500.00 in year three. The expected increase in earnings for every subsequent year is a constant $30,000.00. The price of Going Places' stock increased by 25.36% after the campaign announcement. Expected annual EPS if the company does not undertake the campaign is $50.00 forever. What is the implied NPVGO of the marketing campaign under the assumption of a 12% required rate of return? The NPVGO is $105.68. The NPVGO is $125.77. The NPVGO is $132.49. The NPVGO is $118.36
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