13-1A - Payback Period and NPV Grey Animations is considering replacing its current network of computers with newer, faster more efficient models. It purchased its current computers three years ago for $100,000 and at that time the company expected the computers to last for five years with a residual value of $10,000. If the computers were sold today, they would fetch $35,000 New computers could be purchased today for $150,000 and would have an expected life of five years. Over the five-year life, the computers would reduce operating expenses by an estimated $40,000 per year for the first three years, and by $20,000 in the last two years. The estimate residual value of the new computers is $12,000. The project's cost of capital is 12% a.) Calculate the project's cash payback period. b.) Calculate the project's net present value 13-2A-IRR Using the information from 13-1A, compute the internal rate of return. 13-1B - Payback Period and NPV Barry Cabs is a sole its cab 5 years ago for $40,000. When it purchased the cab it expected it to be useful for 8 years with a residual value of $5,000. Barry thinks he could sell the cab today for $14,000. rietorship that owns and operates one taxi cab. The company purchased Barry is considering replacing the old cab with a new, all-electric taxi. The all electric car would cost $60,000 and would have an expected useful life of 8 years. Over its 8 year life, the cab would reduce annual operating costs (mostly gas and maintenance) by $8,000 per year for the first 6 years, and S10,000 per year thereafter. After 8 years, it is expected the taxi would have a $2,000 residual value. Barry's cost of borrowing is 15%. a.) Calculate the project's cash payback period. b.) Calculate the project's net present value 13-2B IRR Using the information from 13-1B, compute the internal rate of return