Question
Consider the following cash flows of two mutually exclusive projects for AZ-Motorcars. Assume the discount rate for AZ-Motorcars is 12 percent. Year AZM Mini-SUV AZF
| Consider the following cash flows of two mutually exclusive projects for AZ-Motorcars. Assume the discount rate for AZ-Motorcars is 12 percent. |
| Year | AZM Mini-SUV | AZF Full-SUV | ||||
| 0 | $ | 500,000 | $ | 850,000 | ||
| 1 | 330,000 | 360,000 | ||||
| 2 | 200,000 | 440,000 | ||||
| 3 | 160,000 | 300,000 | ||||
| a. | What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places (e.g., 32.16).) |
| Payback period | |
| AZM Mini-SUV | years |
| AZF Full-SUV | years |
| b. | What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places (e.g., 32.16).) |
| NPV | |
| AZM Mini-SUV | $ |
| AZF Full-SUV | $ |
| c. | What is the IRR for each project? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places (e.g., 32.16).) |
| IRR | |
| AZM Mini-SUV | % |
| AZF Full-SUV | % |
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Quantitative Analysis For Management
Authors: Barry Render, Ralph M. Stair, Michael E. Hanna, Trevor S. Hale
14th Edition
0137943601, 9780137943609
