Two mutually exclusive investment opportunities require an initial investment of

$$7$ million. Investment A pays $$1\mathrm{.}8$ million per year in perpetuity, while

investment $B$ pays $$1\mathrm{.}3$ million in the first year, with cash flows increasing by

$3\%$ per year after that. At what cost of capital would an investor regard both

opportunities as being equivalent?

A$.3\%$

B$.12\%$

C$.11\%$

D$.5\%$