ABC Ltd. is considering two investment opportunities. The first opportunity requires an initial investment of $100,000 and is expected to generate a cash flow of $25,000 per year for five years. The second opportunity requires an initial investment of $150,000 and is expected to generate a cash flow of $35,000 per year for six years. ABC Ltd.'s cost of capital is 10%.

a) Which investment opportunity should ABC Ltd. choose if it wants to maximize its net present value (NPV)? Show all calculations.
b) Calculate the internal rate of return (IRR) for each investment opportunity. Which investment opportunity should ABC Ltd. choose based on IRR?

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