Capital Budgets $-$ Please show required calculation steps, thank you!

DMT Business is considering an investment of $ $250,000$ in a capital project. The project will generate $ $50,000$ in cash inflow each year over the next ten years. The company$$s weighted average cost of capital is $10\%.$

Calculate:

The payback period.

The Net Present Value of the project.

The Internal Rate of Return $($IRR$)$ of the project.

Practice Question $2$

Luster Electronics Company is analyzing two capital projects, A & B$.$ Each has an initial cost of $$12,000,$ and the company$$s WACC is $12\%.$ Projected cash flows are in the table below.

Year Project A Project B

$0($$$12,000)($$$12,000)$

$17,0005,000$

$24,0003,500$

$33,5003,000$

$43,0002,500$

$52,3002,000$

$62,0001,500$

For both projects, calculate the payback periods, NPV$,$ and IRR.

Which project would you recommend the company pursue?