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Business, 19.06.2020 05:57 id0617045

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 $48,000. The net cash flows for each type of equipment are given below. Year A B
0 -30000 -48000
1 6000 24000
2 6000 10000
3 12000 21000
4 6000 7000
5 25564 26610
Compute the discounted payback period, where i=8% for both pieces of equipment. Hint: For A, PB3= -12,313

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