Question: Question 20 1 pts Question #20 and #21 will use the following setup. Texas Petro Inc. is intending to drill a new line of oil.

Question 20 1 pts Question #20 and #21 will use the

Question 20 1 pts Question #20 and #21 will use the following setup. Texas Petro Inc. is intending to drill a new line of oil. The project would cost $5 million initially and will generate a cash flow of $1.2 million per year forever in future, starting from next year. What is the IRR of the new project? 0 A. 10% 0 B. 22% C. 24% D. 26% D Question 21 1 pts If the cost of capital is 10%, what is the NPV of the new project? O A. $6 million B. $7 million O C. $12 million D. An infinite amount of NPV since the cash flow of $1.2 million will be forever in future

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