You are deciding between two mutually exclusive investment opportunities. They both require the same initial investment of $10 million. Project X generates $5 million per year (starting at the end of the first year) in perpetuity. Project Y generates $4 million at the end of the first year and will grow at 5% per year forever after that. The cost of capital is 10%.

a. Which project has the highest IRR?

b. What project should be chosen?