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Two mutually exclusive investment opportunities require an initial investment of $8 million Investment A then generates $1.70 million per year in perpetuity, while investment B
Two mutually exclusive investment opportunities require an initial investment of $8 million Investment A then generates $1.70 million per year in perpetuity, while investment B pays $1.00 million in the first y with cash flows increasing by 5% per year after that. At what cost of capital would an investor regard both opportunities as being equivalent? OA. 13% OB. 12% OC. 6% OD. 3%
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