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

question 48

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. The NPV for the British investment is estimated at ________.

• A) $3,092
• B) $6,420
• C) £3,092
• D) $0

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Definitions:

Business Trust

A legal entity formed under trust law to pursue business activities, offering participants flexibility in management and investment.

Assets

Economic resources or owned items of value that an individual, company, or organization possesses.

Profits

The financial gain obtained after subtracting expenses from revenue in a business operation.

Syndicate

A group of individuals or organizations combined to undertake some specific business venture or share the risk in investments.