are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $9.6 million. Investment A will generate $1.86 million per year​ (starting at the end of the first​ year) in perpetuity. Investment B will generate $1.55 million at the end of the first​ year, and its revenues will grow at 2.2% per year for every year after that. Which investment has the higher​ IRR? (Round to the nearest​integer.) Which investment has the higher NPV when the cost of capital is 7.8%​? In this​ case, for what values of the cost of capital does picking the higher IRR give the correct answer as to which investment is the best​ opportunity?

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A: Step 1:

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A:

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A:

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.