Barett Pharma is considering a drug project that costs $2.5 million today and is expected to generate an annual cash flow of $227000 starting end of 2^nd year, growing at 5% per annum forever. In order to find the discount rate where Barett Pharma will be indifferent between accepting or rejecting the project, which the equation will be correct?

Select one:

a. 2.5=0.227/(r0.05)2.5=0.227/(r0.05)

b. 2.5=(0.227/(r0.05))(1/(1+r)2.5=(0.227/(r0.05))(1/(1+r)

c. None of the above

d. 2.5=0.227/r