Question
Consider the following cash flows of two mutually exclusive projects for AZ Motorcars. Assume the discount rate for both projects is 8 percent. Year AZM
Consider the following cash flows of two mutually exclusive projects for AZ Motorcars. Assume the discount rate for both projects is 8 percent.
Year | AZM Mini-SUV | AZF Full-SUV | ||||
0 | $ | 530,000 | $ | 880,000 | ||
1 | 336,000 | 366,000 | ||||
2 | 212,000 | 452,000 | ||||
3 | 166,000 | 306,000 | ||||
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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