PROBLEM 3 (15 Points) Super Products is considering two projects in which to invest. Projeet A costs $272,000 and offers eight annual net cash inflows of S65,000 Project B costs $380,000 and offers nine annual net cash inflows of $80,000. REQUIRED: a. If Super Products uses a 10.2% discount rate, using Net Present Value, which if any of the projects should the company undertake and why? b. If both projects are acceptable, then using the Profitabilty Index, which one is the best and explain why? PROBLEM 4 (20 Points) Management of Pembroke Corporation is evaluating the purchase of a new machine as a replacement for a less efficient machine that would then be sold. The cost of the new machine, including delivery and installation, is S575,000. If the equipment is purchased, Pembroke will incur $5,000 in removing the present machine and revamping service facilities. The present machine has a book value of $100,000 and a remaining useful life of 10 years. The current machine has a current resale value of $40,000. Management has provided you with the following comparative cost data for the machines: Current 400,000 S0.30 New 500,000 S0.30 Annual production in units Selling price per unit Annual costs Labor Depreciation (SL) Other cash operating costs S30,000 S10,000 $48,000 10 years $25,000 S17,500 S20,000 10 years Demand for the product will allow sales to be whatever is produced. The ex pectation is that both machines will have little if any salvage value. The company uses 15% as its discount rate. REQUIRED: a. Compute the payback period for the new machine. b. Compute the NPV for the new machine c. Based on the information and your calculations, should the new machine be purchased? Explain your