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Comparing Investment Criteria Consider the following cash flows of two mutually exclusive projects for A-Z Motorcars. Assume the discount rate for both projects is 10
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Comparing Investment CriteriaConsider the following cash flows of two mutually exclusive projects for A-Z Motorcars. Assume the discount rate for both projects is 10 percent.
Comparing Investment CriteriaConsider the following cash flows of two mutually exclusive projects for A-Z Motorcars. Assume the discount rate for both projects is 10 percent.
| YEAR | AZM MINI-SUV | AZF FULL-SUV |
| 0 | $650,000 | $975,000 |
| 1 | 370,000 | 490,000 |
| 2 | 310,000 | 460,000 |
| 3 | 260,000 | 410,000 |
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page 225Based on the payback period, which project should be taken?
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Based on the NPV, which project should be taken?
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Based on the IRR, which project should be taken?
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Based on the above analysis, is incremental IRR analysis necessary? If yes, please conduct the analysis.
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