Digi Corporation is considering replacing a hand operated machine with a brand new fully

automated machine. The company has two types of machine to choose and they are mutually

exclusive. The firm's cost of capital is $10\%.$ Below are the expected cash flows generated by

both $machine{s}_{{?}_{?}}$

Calculate the following:

a$)$ Payback period for both machines

b$)$ Net present value for both machines

c$)$ Internal rate of return for Machine BB

d$)$ Which machine should the company choose and why?

e$)$ What are the benefits of capital budgeting?