Problem 5-16 Comparing Investment Criteria
Consider the following cash flows of two mutually exclusive projects for AZ-Motorcars. Assume the discount rate for AZ-Motorcars is 10 percent.
Year AZM
Mini-SUV AZF
Full-SUV
0 -$ 450,000 -$ 800,000
1 320,000 350,000
2 180,000 420,000
3 150,000 290,000
________________________________________
a. What is the payback period for each project? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))
Payback period
AZM Mini-SUV
AZF Full-SUV
________________________________________
b. What is the NPV for each project? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))
NPV
AZM Mini-SUV mce_markernbsp;
AZF Full-SUV mce_markernbsp;
________________________________________
c. What is the IRR period for each project? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))
IRR
AZM Mini-SUV %
AZF Full-SUV %
________________________________________