A company has identified the following investments as looking promising. Each requires an initial

investment of $$1\mathrm{.}2$ million. Which is the best investment?

A$.$ a perpetuity that generates a cash flow at the end of year $1$ of $$100,000,$ has a growth

rate of $1\mathrm{.}25\%,$ and a cost of capital of $10\mathrm{.}6\%$

B$.$ a perpetuity that generates a cash flow at the end of year $1$ of $$800,000,$ has a growth

rate of $2\mathrm{.}25\%,$ and a cost of capital of $11\%$

C$.$ an investment that generates a cash flow of $$400,000$ at the end of each of the next

five years, when the cost of capital is $7\%$

D$.$ an investment that generates a cash flow of $$200,000$ at the end of each of the next

ten years, when the cost of capital is $7\%$