Hab Systems wants to replace their existing machinery and is considering two mutually exclusive

projects. Project Delit and Project Sonet. Details are as follows :

You have been asked to analyse the projects and submit a report to the CFO. Assume cost of

Capital as $15\%.$ List and discuss the techniques of capital budgeting, which can be applied to

analyse these Projects? Would you suggest time adjusted techniques or otherwise, give reasons?

Evaluate the Payback Period of the two Projects.

Apply the time adjusted techniques and compare the results of the two Projects.

Which of them should be taken up by the Management and why?