The table below shows the cash flow diagram of two machinery investments with different life spans.

Machinery A and Machinery B

Discount rate=%12

Year Cash flow(A) Cash flow(B)

0 -100 -250

1 150 300

2 150 300

3 150 300

4 150

5 150

6 150

Equivalent cash flow 125,68 195,91

NPV 516,71 470,55

a) Please explain briefly which machinery investment is more profitable?

b) As a financial analyst please explain whether it is possible to compare two investments with different life spans. If no why? If yes why?