Question: 5. A firm begins the year with a Book Value of $10 million. During the year it generates $5 million in net profits. It paid

5. A firm begins the year with a Book Value of $10 million. During the year it generates $5 million in net profits. It paid $1 million in interest on its bank loan. It decides to pay $3 million in dividends. What is its new Book Value at the start of next year?

a) $11 million

b) $12 million

c) $15 million

d) $16 million

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