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Iota Industries is an all-equity firm with 50 million shares outstanding.Iota has $200 million in cash and expects future free cash flows of $75 million per year.Management plans to use the cash to expand the firm's operations,which in turn will increase future free cash flows by 12%.Iota's cost of capital is 10% and assume that capital markets are perfect.
-The value of Iota if they use the $200 million to expand is closest to:
Variable Costs
Expenses that change in proportion to the activity or volume of business, such as materials and labor costs.
Fixed Costs
Rephrased: Expenses that remain constant regardless of the company's level of production or business activity.
Trucking Department
A specialized division within a company responsible for the management and operation of trucking logistics, including transportation and delivery services.
Peak-Period Requirements
The increased demand or resources needed during the busiest or most active times for a business or service.
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