Corporate Services is evaluating two independent projects. Axis is 100% equity financed. Project A has an IRR of 16% and Project B has an IRR of 12%. The beta for project A, project B, and the overall firm are 1.6, 0.8, and 1.2, respectively. The risk-free rate is 2%; the expected return on the market is 12%. Given this information, company should..?

The company owns land that has been discovered to have vast supplies of oil. Power is considering the construction of an oil rig at a cost of $60 million. The price of oil is $65/barrel and the costs of production are $25/barrel. The firm expects both the price and costs to be stable forever. They also expect to produce 200,000 barrels of oil per year forever. The cost of capital for the project is 8%. Ignore taxes. What is the net present value of the project?