Chooses to go ahead with the sponsorship

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An auto-parts company is deciding whether to sponsor a racing team for a cost of $3500000. The sponsorship would last for 4 years and is expected to increase cash flows by $760000 per year.

If the discount rate is 9%, what will be the change in the value of the company if it chooses to go ahead with the sponsorship?

Reference no: EM131077911

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