A MS GLOW is considering 2 alternative investment proposals. The first proposal calls for total replacement of the company’s machines and equipment, while the second proposal involves repairing some...

A MS GLOW is considering 2 alternative investment proposals. The first proposal calls for total  replacement of the company’s machines and equipment, while the second proposal involves  repairing some parts of the existing machines and equipment. The company will only choose to  implement one of the proposed projects for this year. The projected cash flows associated with  each project are as per table below. The discount rate used by the company is 15%.

Answer the following questions:

(a) Calculate the payback period for each project.

(b) Calculate the net present value (NPV) for each project.

(c) Calculate the profitability index of each project.

(d) Explain to the company which project should be implemented. Support your  answer.