Aardvark Software, Inc. can purchase all the stock of Zebra Computer Services for $1,000,000 in cash. Zebra is expected to generate net after-tax cash flows of $100,000 per year for each of the next 10 years. Aardvark should:

Select one:

A.purchase Zebra only if Aardvark's cost of capital is above 10%.

B.purchase Zebra only if Aardvark's cost of capital is between 5% and 10%.

C.not purchase Zebra Computer Services.

D.purchase Zebra Computer Services.