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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 | $ | 525,000 | $ | 875,000 | ||
1 | 335,000 | 365,000 | ||||
2 | 210,000 | 450,000 | ||||
3 | 165,000 | 305,000 | ||||
a. | What is the payback period for each project?
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