TABLE 19.1 Use the Information to Answer Following Question(s)

question 43

Multiple Choice

TABLE 19.1
Use the information to answer following question(s) .
Jensen Aquatics Inc., which manufactures and sells scuba gear worldwide, is considering an investment in either Europe or Great Britain. Consider the following cash flows for each project, assume a 12% wacc, and consider these to be average risk projects for the firm. Answer the questions that follow.

-Refer to Table 19.1. Which of the following best summarizes the preliminary results of the investment analysis for the two prospective investments.

• A) The British investment should be accepted, the European investment rejected.
• B) The British investment is superior to the European investment.
• C) Both investments are acceptable.
• D) None of the above is true.

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Definitions:

Stamp Act

A 1765 British law that imposed a tax on all paper documents in the American colonies, sparking widespread protest and helping to fuel the American Revolutionary movement.

Declare Independence

The act of a region or group formally stating their intention to become independent and govern themselves, often through a formal declaration.

British Militaries

The armed forces of the United Kingdom, consisting of the Royal Navy, British Army, and Royal Air Force.

George Washington

The first President of the United States, serving from 1789 to 1797, a Founding Father, and Commander-in-Chief of the Continental Army during the American Revolutionary War.