You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $10.1 million. Investment A will generate $1.97 million per year(starting at the end of the firstyear) in perpetuity. Investment B will generate $1.54 million at the end of the firstyear, and its revenues will grow at 2.6% per year for every year after that.

a. Which investment has the higherIRR?

b. Which investment has the higher NPV when the cost of capital is 7.6 %7.6%?