part 1:

part 2:

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

Cost of existing packing machine WDV Rate over 10-years' of life unexpired life of existing machine Current scrap value of existing machine Cost of new machine WDV Rate over 5-years' of life Salvage value of new machine Annual savings in packing expenses Marginal Tax Rate Hurdle Rate 5,00,000 20% 5 years 1,00,000 6,00,000 40% HY HY 1,20,000 30% 10% Compute: 1) Net Incremental Cash Flows for the project 2) Compute Payback Period, NPV and IRR of the project Cost of existing cleaning equipment 5 years ago 10,00,000 WDV dep rate 40% Current scrap value * 1,00,000 New equipment cost * 12,00,000 WDV dep rate of 5 years' of life 40% Selling price of new equipment after its life * 2,00,000 Annual reduction in expenses * 2,00,000 Marginal Tax Rate 30% Hurdle Rate 10% Compute: 1) Net Incremental Cash Flows for the project 2) Compute Payback Period, NPV and IRR of the project