You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $9.5 million. Investment A will generate $2.08 million per year (starting at the end of the first year) in perpetuity. Investment B will generate $1.44 million at the end of the first year, and its revenues will grow at 2.4% per year for every year after that.

a. What is the IRR for Investment A?

b. What is the IRR for Investment B

c. Which investment has the higher NPV when the cost of capital is 6.7%?

c. In this case, when does picking the higher IRR give the correct answer as to which investment is the best opportunity?