Consider the following mutually exclusive pieces of equipment that perform the same task. The two alternatives available provide the following set of after-tax net cash flows:

      Year          Cash Flow(A)    Cash Flow(B)

       0              -120,000             -120,000

     1                  23,000                  25,000

       2                  23,000                  25,000

       3                  23,000                 25,000

       4                 32,000                  25,000

       5                  32,000                 25,000

       6                  32,000                   25,000

       7                                                 25,000

       8                                                 25,000

       9                                                 25,000

Equipment A has an expected life of three years, whereas equipment B has an expected life of nine years. Assume a required rate of return of 7 percent.

a. Calculate each equipment’s payback period.

b. Calculate each equipment’s discounted payback period.

c. Calculate each equipment’s Net Present Value (NPV).

d. calculate each equipment’s internal rate of return.