A company has $250,000 to invest. Their cost of capital is 6% compounded annually. They are looking at two investment options and each of these options require an initial investment of $250,000: (I) A perpetuity paying $15,750 at the end of each year. (II) An investment with net cashflows of $32,500 at the end of each year for 10 years. Which of the following is a correct statement? A. You shouldnt invest in either of these options as each of them has a negative NPV. B. Invest in I because it has the highest NPV and its NPV is greater than 0. C. Invest in ether I or II because each of them has a NPV greater than 0. D. Invest in II because it has the highest NPV and its NPV is greater than 0.

• A.

  You shouldnt invest in either of these options as each of them has a negative NPV.

• B.

  Invest in I because it has the highest NPV and its NPV is greater than 0.

• C.

  Invest in ether I or II because each of them has a NPV greater than 0.

• D.

  Invest in II because it has the highest NPV and its NPV is greater than 0.