A U.S.-based company, XYZ Corp., is considering two investment options in foreign countries: Investment 1, which involves investing $8 million in a project in Country A, and Investment 2, which involves investing $12 million in a project in Country B. Investment 1 is expected to generate an annual net income of $1.2 million before taxes, while Investment 2 is expected to generate an annual net income of $1.8 million before taxes. The corporate tax rate in Country A is 30%, while the corporate tax rate in Country B is 25%. In addition, XYZ Corp. is subject to a U.S. corporate tax rate of 21% and a foreign tax credit limit of 80%. Assuming XYZ Corp. is taxed on a worldwide basis, which investment option should it choose in order to maximize its after-tax income?

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