A firm is considering two mutually exclusive projects. Project A costs $20 million and will generate a cash flow of $3 million a year, each year, for the next 15 years. Project B costs $100 million and will generate a cash flow of $21 million a year, each year, for the next 15 years. For both projects, the first cash flow comes one year from the day on which the project is paid for and each subsequent cash flow comes one year aer the previous cash flow. The discount rate applicable to both projects is 20% per year compounded annually. What is the internal rate of return for the incremental project, and which project, if any, should be accepted? Round all intermediate answers to 6 decimal points. Your final answer for the internal rate of return should be within 0.05% of the correct answer choice.

A) The internal rate of return of the incremental project is 21.25% and both projects should be rejected. B) The internal rate of return of the incremental project is 12.40% and project B should be accepted. C) The internal rate of return of the incremental project is 19.56% and project B should be accepted. D) The internal rate of return of the incremental project is 7.16% and project A should be accepted.