AZM 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 of dollars, to be received at the end of each period, are estimated to be:

Year	0	1	2	3	4	5
Gas-Powered	-540	320	240	160	40	0
Fuel Cell	-650	40	80	160	300	600

1. Compute each projects payback period.

2. What is each projects internal rate of return?

3. Compute each projects net present value, assuming that the appropriate discount rate is 10% per year.

4. Assuming AZMs 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.

5. Compute each projects NPV again, assuming a discount rate of 14% per year. Does this change your recommendation? Explain the intuition.