You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $10.0 million. Investment A will generate $2.00 million per year (starting at the end of the first year) in perpetuity. Investment B will generate $1.50 million at the end of the first year, and its revenues will grow at 2.0% 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 7.0%? E… a. Which investment has the higher IRR? The IRR of investment A is %. (Round to the nearest integer.) The IRR of investment B is % (Round to the nearest integer.) Which project has the higher IRR? (Select from the drop-down menu.) b. Which investment has the higher NPV when the cost of capital is 7.0%? The NPV of investment A is $ million. (Round to two decimal places.) The NPV of investment B is $ million. (Round to two decimal places.) You should pick investment (Select from the drop-down menu.)
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