A Company Can Invest $20,000,000 for Three Years in Option

Multiple Choice

A company can invest $20,000,000 for three years in Option A paying out $7,500,000, $8,500,000, and $9,500,000 respectively. For an investment of $1,500,000, Option B will pay out $650,000, $750,000, and $850,000. Where should the company invest its money given a hurdle rate of 9%?

A) Option A as it has the higher IRR.
B) Option B as it has the higher IRR.
C) The analysis does not indicate a better option.
D) Option A as it has the higher NPV.
E) Option B as it has the higher NPV.