Consider the following cash flows of two mutually exclusive projects for A-Z Motorcars. Assume the discount rate for both projects is 11 percent. AZM AZF Year Mini-SUV Full-SUV -$895,000 $545,000 1 339,000 369,000 458,000 309,000 2 218,000 3 169,000 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.) a. AZM payback period |AZF payback period b. AZM NPV years years AZF NPV c. AZM IRR % AZF IRR %
Consider the following cash flows of two mutually exclusive projects for A-Z Motorcars. Assume the discount rate for both projects is 11 percent. AZM AZF Year Mini-SUV Full-SUV -$895,000 $545,000 1 339,000 369,000 458,000 309,000 2 218,000 3 169,000 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.) a. AZM payback period |AZF payback period b. AZM NPV years years AZF NPV c. AZM IRR % AZF IRR %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Consider the following cash flows of two mutually exclusive projects for A-Z Motorcars.
Assume the discount rate for both projects is 11 percent.
AZM
AZF
Year Mini-SUV
Full-SUV
-$895,000
$545,000
1
339,000
218,000
169,000
369,000
458,000
309,000
2
3
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.)
a. AZM payback period
AZF payback period
b. AZM NPV
|years
|years
AZF NPV
AZM IRR
%
с.
AZF IRR
%
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