Companies A and B plan to jointly develop a project, with an equal share of investment and profit. The project needs $4M for investment and generates an annual income of $1M for 6 years. Company A has $2M cash for the investment. Company B has only $1M available, and needs to take a loan of $1M. The loan will be annually repaid at $0.5M for 3 years. Assume the two companies have the same MARR=10%.

(1) Calculate the IRRs for A and B, respectively.

(2) From (1), you should find that B will decide not join the project. This is due to the high interest rate of the loan. If B can negotiate a lower interest rate, how much is the maximum interest rate that is acceptable to B?

(3) In order to make the project possible, A decides to give more share of annual income to B. How much is the minimum annual income that A has to give to B?

(4) A also considers doing the project without B, by directly taking a loan of $2M at the same interest rate as B. Is this a better option?