You are deciding between two mutually exclusive projects. The first project will generate 2 million a year (starting at the end of the first year) in perpetuity. The second project will generate 1.5 million at the end of the first year and the profit will grow at 2 percent per year for every year after that. The first project costs 10 million while the second 9 million. Which investment would you pick if the cost of capital is 8% and why?

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