Here is the cash flow timeline for this problem:

The timeline starts at Year 0 and goes on forever. It shows a cash flow of -104.7 in Year 0 and cash flows of 28.8 each year starting from Year 2, which continue forever. All the cash flows are in millions of dollars.

Calculate the NPV of this investment opportunity if your cost of capital is

6.1 %6.1%.

The NPV of this investment opportunity is

$nothing

million. (Round to one decimal place.)

Should you make the investment? (Select the best choice below.)

A.

No, because the NPV is not greater than the initial costs.

B.

Yes, because the project will generate cash flows forever.

C.

Yes, because the NPV is positive.

D.

No, because the NPV is less than zero.

Calculate the IRR.

The IRR of the project is

nothing%.

(Round to two decimal places.)

Does the IRR rule agree with the NPV rule?(Select the best choice below.)

A.

Since the IRR is less than the

6.1 %6.1%

discount rate, the IRR rule gives the same answer as the NPV rule.

B.

Since the IRR exceeds the

6.1 %6.1%

discount rate, the IRR rule gives the same answer as the NPV rule.

C.

Since the IRR is less than the

6.1 %6.1%

discount rate, the IRR rule gives a different answer than the NPV rule.

D.

Since the IRR exceeds the

6.1 %6.1%

discount rate, the IRR rule gives a different answer than the NPV rule.

Here is the cash Tlow timellne for this problem. Years 0 2 4 Forever Cash Flow ( million)-104.7 28.8 28.8 28.8 28.8 Calculate the NPV of this investment opportunity if your cost of capital is 6.1%