Polaris Industries has $1.5 million available for additional innovation on the V
ID: 2722622 • Letter: P
Question
Polaris Industries has $1.5 million available for additional innovation on the Victory Vision motorcycle. These include five indivisible, equal-lived alternatives, each of which guarantees the investment can be exited after 6 years with the initial investment returned. In addition, each year Polaris will receive an annual return as noted below. MARR is 15%. What are the present worth and internal rate of return for each investment? PW_1 = $ PW_2 = $ PW_3 = $ PW_4 = s PW_5 = s and IRR_1 = IRR_2 = IRR_3 = IRR_4 = IRR_5 = Round your answers to the nearest dollar and to the nearest one-hundredth of 1%. The tolerance is +/- 1 for dollar amounts and +/-0.01 for percentages.Explanation / Answer
year inv 1 inv 2 inv 3 inv 4 inv 5 0 -350000 -300000 -250000 -500000 -400000 1 90000 85000 75000 130000 115000 2 90000 85000 75000 130000 115000 3 90000 85000 75000 130000 115000 4 90000 85000 75000 130000 115000 5 90000 85000 75000 130000 115000 6 90000 85000 75000 130000 115000 present worth (use npv excl function without considering initial investment) $340,603.44 321681.03 283836.20 491982.75 435215.51 IRR (use IRR excel function) 14.00% 17.65% 19.91% 14.40% 18.22%