You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $ 10.3 million. Investment A will generate $ 2.14 million per year(starting at the end of the firstyear) in perpetuity. Investment B will generate $ 1.53 million at the end of the firstyear, and its revenues will grow at 2.7 % 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 6.6 %?

c. In thiscase, for what values of the cost of capital does picking the higher IRR give the correct answer as to which investment is the bestopportunity?