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Question 3 (5 marks) Your company has $2 million in free cash flow and is deciding what is the best way to utilize that capital.

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Question 3 (5 marks) Your company has $2 million in free cash flow and is deciding what is the best way to utilize that capital. You have a few choices (1) You could consider investing in additional production capacity to increase output and sales, which requires an investment of $2 million and a net present value (NPV) of $3.26 million. (2) Alternatively, it could offer to distribute $2 dividends to each of the company's one million shareholders. (3) Finally, it could use that excess cash to purchase 200,000 shares at $10 each. Among the three choices available above, which would be the best decision for your company? Explain

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