You are deciding between two mutually exclusive investment opportunities. both require the same initial investment of $ 10.1 million. investment a will generate $ 1.97 million per year (starting at the end of the first year) in perpetuity. investment b will generate $ 1.58 million at the end of the first year, and its revenues will grow at 2.9 % 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 5.2 %?

c. 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?

If the ceo of a large, diversified, firm were filling out a fitness report on a division manager (i.e., "grading" the manager), which of the following situations would be likely to cause the manager to receive a better grade? in all cases, assume that other things are held constant.a. the division's basic earning power ratio is above the average of other firms in its industry.b. the division's total assets turnover ratio is below the average for other firms in its industry.c. the division's debt ratio is above the average for other firms in the industry.d. the division's inventory turnover is 6, whereas the average for its competitors is 8.e. the division's dso (days' sales outstanding) is 40, whereas the average for its competitors is 30.