Question: Exercise 7 . Enterprise, Inc. is planning to spend $ 1 0 million on advertising. The company expects this expenditure to result in annual incremental

Exercise 7. Enterprise, Inc. is planning to spend $10 million on advertising. The company expects this expenditure to result in annual incremental cash flows of $1.6 million in perpetuity. The corporate opportunity cost of capital for this type of project is 12.5 percent.
(a) Calculate the NPV for the planned advertising.
(b) Calculate the internal rate of return.
(c) Should the company go forward with the planned advertising?
Exercise 7. Enterprise, Inc. is planning to spend $10 million on

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