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Please explain in detail(Please don't use Excel to solve) show work:a. Calculate each projects payback...

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Finance

Please explain in detail(Please don't use Excel to solve) show work:imagea. Calculate each projects payback period.

b. Calculate each projects net present value.

c. Calculate each projects IRR.

d. Which project should be chosen using a, b and c?

e. Do you foresee any problem(s) with the action you have taken in d? Explain.

2. The B.T. Knight Corporation is considering two mutually exclusive pieces of machinery that perform the same task. The cost of capital for the projects is 15%. The two alternatives available provide the following set of after-tax cash flows: Year 0 1 Equipment A -$20,000 12,590 12,590 12,590 2 3 4 Equipment B -$20,000 6,625 6,625 6,625 6,625 6,625 6,625 6,625 6,625 6,625 5 6 s 0 0

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