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Two mutually exclusive investment opportunities require an initial investment of $7 million. Investment A then generates $1.50 million per year in perpetuity, while investment B

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Two mutually exclusive investment opportunities require an initial investment of $7 million. Investment A then generates $1.50 million per year in perpetuity, while investment B pays $1.20 million in the first year, with cash flows increasing by 5% per year after that. At what cost of capital would an investor regard both opportunities as being equivalent? A. 13% O B. 28% OC. 25% OD, 6%

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