"You have to decide whether or not to invest in the following $3$ projects. The cost of capital is $6\%.$

Project A requires an initial investment of $$1,000,000$ now. The project will generate cash flows of $$50,000$ in perpetuity every $6$ months, starting $6$ months from now. Project B requires an initial investment of $$1,000,000$ now. The project will generate cash flows of $$100,000$ every year for the next $40$ years, starting $1$ year from now. Project $C$ requires an initial investment of $$1,000,000$ now. The project will generate cash flows in perpetuity, starting $1$ year from now. For the next $10$ years, the project generates $$60,000$ every year. After that, the annual cash flows will increase by $3\%$ every year.

Calculate the NPV for each project.

Calculate the IRR for project A and B$.$

If you were asked to pick at most $1$ project to invest, which one would you pick?

Why?

If cost didn't matter, would you invest in both? Why? $"$