1. 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	-$30,000	-$30,000
1	13,000	6,500
2	13,000	6,500
3	13,000	6,500
4		6,500
5		6,500
6		6,500
7		6,500
8		6,500
9		6,500

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 14 percent.

1. Calculate each equipments payback period. (Rounded to two decimal places)
2. Calculate each equipments discounted payback period. (Rounded to 2 decimal places)
3. Calculate each equipments Net Present Value (NPV). (Rounded to 2 decimal places)
4. Calculate each equipments internal rate of return. (Rounded to 2 decimal places)
5. How would you rank the investments based on the NPV criterion?
6. How would you rank the investments based on the IRR criterion?