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    Present worth of advertising campaign

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    A firm is contemplating an advertising campaign that promises to yield $120 one year fom now for $100 spent now. Explain why the firm should or should not undertake the advertising campaign.

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    https://brainmass.com/economics/the-time-value-of-money/present-worth-of-advertising-campaign-386172

    Solution Preview

    Let us see the incremental cash flows associated
    Current cash outflow=Co=$100
    Net cash inflow at the end of year 1=C1=$120

    Let us see at what level of r, PV of cash net inflows is equal ...

    Solution Summary

    Solution discusses why the given firm should or should not undertake the advertising campaign.

    $2.19