Major Importers Would Like to Spend $211,000 to Expand Its

question 60

Multiple Choice

Major Importers would like to spend $211,000 to expand its warehouse. However, the company has a loan outstanding that must be repaid in 2.5 years and thus will need the $211,000 at that time. The warehouse expansion project is expected to increase the cash inflows by $48,000 in the first year, $139,000 in the second year, and $210,000 a year for the following two years. Should the firm expand at this time? Why or why not?

• A) Yes; because the money will be recovered in 1.69 years
• B) Yes; because the money will be recovered in 1.87 years
• C) Yes; because the money will be recovered in 2.11 years
• D) No; because the project never pays back
• E) No; because the money will not be recovered in time to repay the loan

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Definitions:

Global Citizens

Individuals who identify with being part of an emerging world community and whose actions contribute to building this community's values and practices.

Nation Branding

Efforts by a country to shape public perceptions and improve its image internationally through strategic communications and policy decisions.

Public Opinion

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Public Diplomacy

The means by which a country communicates with foreign publics to inform and influence them, aiming to achieve its foreign policy goals.