An Auto-Parts Company Is Deciding Whether to Sponsor a Racing

question 23

Multiple Choice

An auto-parts company is deciding whether to sponsor a racing team for a cost of $1 million. The sponsorship would last for three years and is expected to increase cash flows by $570,000 per year. If the discount rate is 6.9%, what will be the change in the value of the company if it chooses to go ahead with the sponsorship?

• A) $498,597
• B) $747,896
• C) $797,756
• D) $847,615

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Definitions:

Thalamus

A brain structure that acts as a relay station, processing and transmitting sensory information to the cerebral cortex.

Base of Skull

The bottom part of the skull, upon which the brain rests, consisting of several bones that form the cranial base and provide structural support.

Localization of Function

The concept that specific parts of the brain are responsible for specific psychological or physiological functions.

Phrenology

A now-discredited theory that suggested the shape and size of the skull could determine a person's personality and mental abilities.