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Problem 5-16 Comparing Investment Criteria Consider the following cash flows of two mutually exclusive projects for AZ-Motorcars. Assume the discount rate for both projects is
Problem 5-16 Comparing Investment Criteria
| 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 | $ 480,000 | $ 830,000 |
| 1 | 326,000 | 356,000 |
| 2 | 192,000 | 432,000 |
| 3 | 156,000 | 296,000 |
| 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.) |
| 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.) |
| c. | What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
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International Finance
Authors: Keith Pilbeam
4th Edition
0230362893, 978-0230362895
