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You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $10.5 million. Investment A will generate $2.15 million per
You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $10.5 million. Investment A will generate $2.15 million per year starting at the end of the first year in perpetuity. Investment B will generate S1 49 million at the end of the first year, and its revenues wil grow at 26% 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 6 4%? 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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