Motorola Mobility LLC is a company that develops mobile devices. Headquartered in Chicago, Illinois, United States, the company was formed on January 4, 2011 by the split of Motorola Inc. into two separate companies; Motorola Mobility took on the company's consumer-oriented product lines, including its mobile phone business and its cable modems and set-top boxes for digital cable and satellite television services, while Motorola Solutions retained the company's enterprise-oriented product lines. Early 2012, Google decided to purchase Motorola mobility LLC for $12.5b. Google had a plan to keep Motorola mobility for 5 years. Google financial analysis team made the following forecasts:

Year	Cash flow (in billions)	Net income (in billions)
2012	1.5	1
2013	2.5	2
2014	4	3
2015	3	2
2016	6 (includes 3.5b selling price)	1.5

And that the average book value of asset is $8b and Googles required rate of return is its WACC (11%).

7- Calculate net present value (NPV) for the above investment decision using excel (make formulas viewable). Would you accept or reject this investment decision? Why?

I would accept this investment because the NPV of $659,536 is positive.

8- Calculate payback period. If you know that google accepts projects with 4 years payback period using excel (make formulas viewable). Would you accept that project?

I would not accept the project because the payback period is 4.25 years which is higher than the required payback period of 4 years.

9- Calculate the Motorola project internal rate of return (IRR) using excel (make formulas viewable). Would you accept or reject this project? Why?

I would accept this project since IRR is positive.

10- Calculate the average accounting return (AAR) using excel (make formulas viewable). If you know that the required average accounting return is 25%. Would you accept that project?

I would not accept the project because the AAR of 15.2% is lower than required of 25%.

11- Calculate profitability index of the above project using excel (make formulas viewable). Would you accept or reject that deal? Why?