The Ewert Exploration Company is considering two mutually exclusive plans for extracting oil on property for which it has mineral rights. Both plans call for the expenditure of $9.5 million to drill development wells. Under Plan A, all the oil will be extracted in 1 year, producing a cash flow at t = 1 of $10.5 million; under Plan B, cash flows will be $1.4 million per year for 20 years.

What are the annual incremental cash flows

what rate of return

Identify each project's IRR.