Better health pty ltd is evaluating whether to buy pieces

Question

Problem:

Better Health Pty. Ltd. is evaluating whether to buy pieces of medical equipment each of which requires an up-front expenditure of $1.5 million. The projects are expected to produce the following net cash inflows:

Year    Equipment A   Equipment B

1          $500,000         $2,000,000

2          $1,000,000      $1,000,000

3          $2,000,000      $600,000

1. What is the internal rate of return for each piece of equipment?
2. What is the payback period for each machine?
3. What is the net present value of each machine if the cost of capital is 10 per cent? 5 per cent? 15 per cent?
4. Should Better Health buy both machines, only one, or none? Explain your answer.

Additional Information:

This question is basically belongs to the Finance as well as it explains about computing internal rate of return, payback period and net present value of two equipments.