part 1:

part 2:

You must clearly show yearly Cash Flows, Payback Period, NPV and IRR computed and suggest the decisions.

Cost of existing digging equipment 5-years ago 10,00,000 WDV dep rate 20% Current scrap value 2,00,000 New equipment cost * 12,00,000 WDV dep rate of 5 years' of life 20% Selling price of new equipment after its life 4,00,000 Annual reduction in expenses * 2,00,000 Marginal Tax Rate 35% Hurdle Rate 10% Compute: 1) Net Incremental Cash Flows for the project 2) Compute Payback Period, NPV and IRR of the project HY Price of new Jet 4,00,00,000 WDV dep rate 20% Increase in net working capital 2,00,000 Increase in annual before-tax revenues 20,00,000 Increase in annual operting costs 5,00,000 Project life 3 years salvage value after 3 years 2,50,00,000 Marginal Tax Rate 40% Hurdle Rate 10% Compute: 1) Net Incremental Cash Flows for the project 2) Compute Payback Period, NPV and IRR of the project