Prada Has Ten Million Shares Outstanding, Generates Free Cash Flows

question 80

Multiple Choice

Prada has ten million shares outstanding, generates free cash flows of $ 60 million each year and has a cost of capital of 10%. It also has $40 million of cash on hand. Prada wants to decide whether to repurchase stock or invest the cash in a project that generates free cash flows of $2 million each year. Should Prada invest or repurchase the shares?

• A) indifferent between options
• B) repurchase
• C) invest
• D) cannot say for sure

Describe the structure and function of lipids, including their role in cellular structure and energy provision.

Understand the basic unit of matter and the distinction between various types of chemical structures.

Comprehend the logarithmic nature of the pH scale and how it quantifies the concentration difference between acidic and basic solutions.

Identify the significance of color changes in detecting the presence and concentration of specific substances in chemical tests.

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Definitions:

Choiceboards

Online systems that allow individuals to customize the features of a product or service they wish to purchase.

Niche Marketspaces

Specialized market segments with specific needs and preferences that are distinctly different from the broader market, allowing businesses to target more focused audiences.

Digital Technology

The electronic tools, systems, devices, and resources that generate, store or process data, characterized by high speed and innovation.

Interactive Marketing

Marketing strategies that involve two-way communication between companies and consumers, often leveraging digital platforms.