Question: Please solve this two question Properly Question 5 (10 Marks) Honda Motors is considering three kinds of motorbikes to launch, 100 CC, 200 CC and

 Please solve this two question Properly Question 5 (10 Marks) Honda

Please solve this two question Properly

Question 5 (10 Marks) Honda Motors is considering three kinds of motorbikes to launch, 100 CC, 200 CC and 250CC in this year's capital budget. The projects are independent. The initial investment for the 100 CC, 200 CC and 250 CC systems are $120,000, $200,000 and $250,000 respectively. The fimm's cost of Capital is 8%. On the basis of following cash flows which project will suit Honda? 100 cc 250 cc Year 1 2 3 4 5 6 Rs. 40,000 Rs. 40,000 Rs. 40,000 Rs. 40.000 Rs. 40,000 Rs. 25,000) 200 CC Rs.75,000 Rs. 75,000 Rs.75,000 Rs.75,000 Rs. (40,000) Rs. 75.000 Rs. 100,000 Rs. 100,000 RS. 100,000 Rs. 100,000 Rs. (70,000) Rs. (10.000) a) On the basis of Discounted Payback period, which project should be accepted? b) On the basis of NPV, which project should be accepted? c) On the basis of IRR, which project should be accepted? Question 6 (6 Marks) a. Now that you are finished school, you also have to start paying back your student loans. You borrowed a total of Rs. 12,500. You plan to pay back the loan over 10 years at an interest rate of 9.4% interest, compounded monthly. How much will your monthly payments be? b. Your client is 40 years old and wants to begin saving for retirement. You advise the client to put R$ 8,000 a year into the stock market. You estimate that the market's return will be on average of 11% a year. Assume the investment will be made at the end of the year. How much money will she have by age of 65

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