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Prada has nine million shares outstanding, generates free cash flows of $40 ...
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Prada has nine million shares outstanding, generates free cash flows of $40 million each year and has a cost of capital of 10%. It also has $30 million of cash on hand. Prada wants to decide whether to repurchase shares or invest the cash in a project that generates free cash flow of $5 million each year. Should Prada invest or repurchase the shares?
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