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Problem 12-8 Payback method [LO12-3] Assume a $95,000 investment and the following cash flows for...

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Problem 12-8 Payback method [LO12-3] Assume a $95,000 investment and the following cash flows for two alternatives. a. Calculate the payback for investment A and B. (Round your answers to 2 decimal places.) b. Which investment would you select under the payback method? Investment A Investment B c. If the inflow in the fith year for investment A was $20,000,000 instead of $20,000, would your answer change under the payback method? Yes No Problem 12-13 internal rate of return [LO12-4] Home Security Systems is analyzing the purchase of manulacturing equipment that will cost $58,000. The annual cash inflows for the next three years will be: Use Apgendx B and Appendix D for an approximate answer but calculate your final answer using the excel. a. Determine the intemal rate of retum. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. Wath a cost of capital of 15 percent, should the equipment be purchased? Yes No

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