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You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $ 1 0 . 4 million. Investment A will

You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $ 10.4 million. Investment A will generate $ 1.98 million per year(starting at the end of the first year) in perpetuity. Investment B will generate $ 1.48 million at the end of the first year, and its revenues will grow at 2.8% per year for every year after that.
a. Which investment has the higher IRR?
b. Which investment has the higher NPV when the cost of capital is 5.7%?
c. In this case, when does picking the higher IRR give the correct answer as to which investment is the best opportunity?

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