Question 3- What is the cash cow value and the value of its growth opportunities (NPVGO) if a corporation has current earnings of $5 per share and expects to be able to make an investment of 20% of its earnings next year in a new one-time project with an expected return on invested capital of 24%? The discount rate for the firm is 8%.

1. Cash cow value is $62.50 and NPVGO is $1.85
2. Cash cow value is $20.83 and NPVGO is $2
3. Cash cow value is $62.50 and NPVGO is $14
4. Cash cow value is $25.00 and NPVGO is $3
5. Cash cow value is $25.00 and NPVGO is $3