FIU EIN 6357 – A construction company is considering
A construction company is considering procuring one of two types of heavy construction equipment (A and B). Each type of equipment is expected to have a 5-year useful life with zero salvage value. (A) can be purchased at a cost of $30,000, while (B) would cost $55,000. The net cash flows for each type of equipment are given below.Year A B0 -$30.000 -$48,0001 6,000 24,0002 6,000 10,0003 12,000 21,0004 6000 7,0005 25,564 26,610(a) Compute the payback period for both pieces of equipment.(b) Compute the discounted payback period, where i=8% for both pieces of equipmentPlease explain/show steps… I am really struggling in this class.
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