Question: Sparkling Water Inc sells 4 6 million bottles of drinking water

Sparkling Water Inc. sells 4.6 million bottles of drinking water each year. Each bottle sells for $2, and costs per bottle are $0.45. Sales income and costs occur at year-end. Sales income is expected to rise at 6 percent annually, while costs are expected to rise at 4 percent annually. The relevant discount rate is 12 percent. The corporate tax rate is 34 percent. What is sparkling worth today?

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  • CreatedJune 17, 2015
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