Finance Assignment | Professional Writing
You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $9.7 million. Investment A will generate $1.91 million per year(starting at the end of the first year) in perpetuity. Investment B will generate $1.48 million at the end of the first year, and its revenues will grow at 2.1% per year for every year after that.
The NPV for Investment A is $21.61 million, and for Investment B is $27.30 million.
The IRR for Investment A is 19.69%, and for Investment B is 17.36%.
Taking all of that into account, what is the best investment opportunity when picking the higher IRR occurs for all discount rates higher than
what discount rate? Round to two decimal places.
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