NPVs, IRRs, and MIRRsfor Independent Projects
Edelman Engineering isconsidering including two pieces of equipment, a truck and anoverhead pulley system, in this year's capital budget. The projectsare independent. The cash outlay for the truck is $17,100 and thatfor the pulley system is $22,430. The firm's cost of capital is14%. After-tax cash flows, including depreciation, are asfollows:
| Year | Truck | Pulley |
| 1 | $5,100 | | $7,500 | |
| 2 | 5,100 | | 7,500 | |
| 3 | 5,100 | | 7,500 | |
| 4 | 5,100 | | 7,500 | |
| 5 | 5,100 | | 7,500 | |
Calculate the IRR foreach project. Round your answers to two decimal places.
Truck: Â Â %
What is the correct accept/reject decision for this project?
-Select-Accept or Reject
Pulley: Â Â %
What is the correct accept/reject decision for this project?
-Select-Accept or Reject
Calculate the NPV foreach project. Round your answers to the nearest dollar, ifnecessary. Enter each answer as a whole number. For example, do notenter 1,000,000 as 1 million.
Truck: $
What is the correct accept/reject decision for this project?
-Select-Accept or Reject
Pulley: $
What is the correct accept/reject decision for this project?
-Select-Accept or Reject
Calculate the MIRR foreach project. Round your answers to two decimal places.
Truck: %
What is the correct accept/reject decision for this project?
-Select-Accept or Reject
Pulley: Â Â %
What is the correct accept/reject decision for this project?
-Select-Accept or Reject
