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 –$ 515,000   –$ 865,000   1   333,000     363,000   2   206,000     446,000   3   163,000     303,000       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 and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)     IRR AZM Mini-SUV % AZF Full-SUV %

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
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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

–$

515,000

 

–$

865,000

 

1

 

333,000

   

363,000

 

2

 

206,000

   

446,000

 

3

 

163,000

   

303,000

 
 

 

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 and 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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