1. Zenith Corporation is deciding between the introduction of two new automobiles: a traditional gasoline-powered model, or a hydrogen fuel-cell model. Incremental cash flows in millions are estimated to be:

Year	0	1	2	3	4
Gas-Powered	-100	50	50	40	30
Fuel Cell	-500	100	200	200	300

Assume end-of-year cash flows, and that the appropriate discount rate for NPV analysis is 12%.

(a) Compute each projects payback period.

(b) What is each projects internal rate of return?

(c) Compute each projects net present value.

(d) Assuming Zenith's goal is to maximize firm value, which project should be taken? Support your answer, including a short statement of which evaluation criterion was most relevant, which were less relevant, and why.