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Prada has 10 million shares outstanding, generates free cash flows of $50 mil...
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Prada has 10 million shares outstanding, generates free cash flows of $50 million each year and has a cost of capital of 10%. It also has $50 million of cash on hand. Prada wants to decide whether to repurchase shares or invest the cash in a project that generates free cash flows of $5 million each year. Should Prada invest or repurchase the shares?
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