Please review my solution. If they are wrong , fix them please. I feel like my table is so long, is there any other way to solve this question with more detail & without this table?

Waterways puts much emphasis on cash flow when it plans for capital investments. The company chose its discount rate of 8% based on the rate of return it must pay its owners and creditors. Using that rate,Waterways then uses different methods to determine the best decisions for making capital outlays. In 2009 Waterways is considering buying five new backhoes to replace the backhoes it now has. The new backhoes are faster, cost less to run, provide for more accurate trench digging, have comfort features for the operators, and have 1-year maintenance agreements to go with them.The old backhoes are working just fine, but they do require considerable maintenance.The backhoe operators are very familiar with the old backhoes and would need to learn some new skills to use the new backhoes. The following information is available to use in deciding whether to purchase the new backhoes. Old Backhoes New Backhoes Purchase cost when new $90,000 $200,000 Salvage value now $42,000 Investment in major overhaul needed in next year $55,000 Salvage value in 8 years $15,000 $90,000 Remaining life 8 years 8 years Net cash flow generated each year $40,425 $53,900 (a) Evaluate in the following ways whether to purchase the new equipment or overhaul the old equipment. (Hint: For the old machine, the initial investment is the cost of the overhaul. For the new machine, subtract the salvage value of the old machine to determine the initial cost of the investment.) (1) Using the net present value method for buying new or keeping the old. (2) Using the payback method for each choice. (Hint: For the old machine, evaluate the payback of an overhaul.) (3) Comparing the profitability index for each choice. (4) Comparing the internal rate of return for each choice to the required 8% discount rate. (b) Are there any intangible benefits or negatives that would influence this decision? (c) What decision would you make and why? SOLUTION: a) Particulars Purchase Cost when new Salvage Value now Investment in major overhaul needed in next year Salvage Value in 8 years Remaining life (in years) Net Cash Flow generated each year Old Backhoes $90,000.00 $42,000.00 $55,000.00 $15,000.00 8.00 $40,425.00 New Backhoes $200,000.00 $90,000.00 8.00 $53,900.00 Purchase of New Equipment: Particulars 0 1 Initial Investment Net Cash Flow generated each year Salvage Value in 8 years $(158,000.00) 1.000 $(158,000.00) $(158,000.00) 3 4 5 6 7 8 $(158,000.00) Net Cash Flows PVF @ 8% Present Value Cumulative Cash Flows 2 Net Present Value Internal Rate of Return (using excel formula) $53,900.00 $53,900.00 $53,900.00 $53,900.00 $53,900.00 $53,900.00 $53,900.00 $53,900.00 $90,000.00 $53,900.00 0.926 $49,907.41 $(104,100.00) $53,900.00 0.857 $46,210.56 $(50,200.00) $53,900.00 0.794 $42,787.56 $3,700.00 $53,900.00 0.735 $39,618.11 $57,600.00 $53,900.00 0.681 $36,683.43 $111,500.00 $53,900.00 0.630 $33,966.14 $165,400.00 $53,900.00 0.583 $31,450.13 $219,300.00 $143,900.00 0.540 $77,744.69 $363,200.00 $200,368.04 32.47% Profitability Index = Present Value of Cash Inflows / Initial Investment Profitability Index 2.27 Payback Period = A + B/C Where, A = Last period with negative cumulative cash flow B= Absolute value of cumulative cash flows at the end of the period A C = Actual cash flowsduring the period after A Pay Back Period = 2 years + ($50,200 / $53,900) Pay Back Period (in years) 2.93 Overhaul of Old Equipment: Particulars 0 Initial Investment Net Cash Flow generated each year Salvage Value in 8 years $- Net Cash Flows PVF @ 8% Present Value Cumulative Cash Flows Net Present Value Internal Rate of Return (using excel formula) 1 $1.000 $$- 2 3 4 5 6 7 8 $(55,000.00) $40,425.00 $40,425.00 $40,425.00 $40,425.00 $40,425.00 $40,425.00 $40,425.00 $40,425.00 $15,000.00 $(14,575.00) 0.926 $(13,495.37) $(14,575.00) $40,425.00 0.857 $34,657.92 $25,850.00 $40,425.00 0.794 $32,090.67 $66,275.00 $40,425.00 0.735 $29,713.58 $106,700.00 $40,425.00 0.681 $27,512.58 $147,125.00 $40,425.00 0.630 $25,474.61 $187,550.00 $40,425.00 0.583 $23,587.60 $227,975.00 $55,425.00 0.540 $29,944.40 $283,400.00 $189,485.99 277.36% Profitability Index = Present Value of Cash Inflows / Initial Investment Profitability Index 15.04 Payback Period = A + B/C Where, A = Last period with negative cumulative cash flow B= Absolute value of cumulative cash flows at the end of the period A C = Actual cash flowsduring the period after A Pay Back Period = 1 years + ($14,575 / $40,425) Pay Back Period (in years) 1.36 b) The intangible factors can be the reaction of creditors, employees, investors etc. It might be possible that purchasing of new equipment will create positive impact on the company and will act as intangible benefit for the company. c) Its better to purchase the new equipment because basic criteria for evaluating capital budgeting process is net present value. Any project with higher net present value shall be accepted. Thus, in the given case, new equipment shall be purchased because it provides higher net present value