Your lemonade stand located close to the university is expected to generate $$25,000$ next year, and cash flows will grow by $5\%$ each subsequent year indefinitely. The required rate of return is $10\%,$ and ROIC is $20\%.$ After a few years of doing this business, you reduce the cost of capital from $10\%$ to $8\mathrm{.}5\%.$ You reinvest the same percentage in the business.

How does it affect the value of your lemonade stand?

increased by $$50,000$

increased by $$160,714$

decreased by $$160,714$

decreased by $$125,000$