What is the combined npv of maserati

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Reference no: EM132659024

Exotic Rentals has four independent projects under consideration, each with a required rate of return of 14%. The total projects budget is $800,000. A table showing the investments and projected free cash flows follow:

Project/Year

Maserati

Lamborghini

Ferrari

BMW i8 Coupe

0 (investment)

$150,380

$221,320

$286,550

$175,500

1

$40,000

$85,000

$100,000

$52,000

2

$80,000

$110,000

$125,000

$90,000

3

$60,000

$110,000

$125,000

$90,000

4

$60,000

$92,000

$125,000

$70,000

5

$95,000

$125,000

$150,000

$135,000

No additional cash flows are expected from any of the five projects after year 5. The year 5 cash flow includes rentals and auction of the exotic vehicles into the secondary car market.

Problem 1: Continuing with Exotic Rentals, what is the combined NPV of these two projects: BMW i8 Coupe and Maserati

[A] $448,464

[B] $384,759

[C] $325,800

[D] $183,302

[E] $509,182

Reference no: EM132659024

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