Blue Co is considering projects purchasing a new production equipment line. is information about these projects:

- Project A: the purchase price (including VAT) is $ 1,500,000, the productive life of machine is 15 years, it will increase in annual cash inflows $90,000. Salvage of equipment line is $50,000 at the end of year 15. The payment will be finished in the first 5 years, $300,000 each year. The replace brushes at the end of year 4, year 8 and year 12 is $30,000; $90,000; $40,000 respectively. Dis rate is 10%

- Project B: the purchase price (including VAT) is $ 1,200,000, the productive life of machine is 10 years, it will increase in annual cash inflows $90,000. Salvage of equipment line is $10,000 at the end of year 10. The replace brushes at the end of year 4, year 8 is $15,000; $5,000 respectively. The seller requires immediate payment of $500,000, and the remainder is deferred for the next two years, $350,000 each year. Dis rate is 10%

Required: 2.1. Determine the cash flows of these projects?

2.2. Calculate NPV of each project? Consult for the manager which project is better and give the reason?

2.3. Calculate the payback period of each project? Consult for the manager which project is better and give the reason?