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Business, 02.04.2021 01:40 hfkdnd

You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $10 million. Investment A will generate $2 million per year (starting at the end of the first year) in perpetuity. Investment B 0 1 2 3 4 A -$50 25 20 20 15 B -$100 20 40 50 60 M08_BERK5561_04_SE_C08.indd 260 20/12/2016 10:28Chapter 8 Investment Decision Rules 261 will generate $1.5 million at the end of the first year and its revenues will grow at 2% per year for every year after that. a. Which investment has the higher IRR

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