Question
Edelman Engineering is considering including two pieces of equipment, a truck and an overhead pulley system,...
Edelman Engineering is considering including two pieces of equipment, a truck and an overhead pulley system, in this year's capital budget. The projects are independent. The cash outlay for the truck is $19,000 and that for the pulley system is $20,000. The firm's cost of capital is 12%. After-tax cash flows, including depreciation, are as follows:
| 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 for each project. Do not round intermediate calculations. Round your answers to two decimal places.
Truck: %
What is the correct accept/reject decision for this project?
Based on the IRR, this project should be
-Select-acceptedrejectedItem 2 .
Pulley: %
What is the correct accept/reject decision for this project?
Based on the IRR, this project should be
-Select-acceptedrejectedItem 4 .
Calculate the NPV for each project. Do not round intermediate calculations. Round your answers to the nearest dollar. Use a minus sign to enter negative values, if any.
Truck: $
What is the correct accept/reject decision for this project?
Based on the NPV, this project should be
-Select-acceptedrejectedItem 6 .
Pulley: $
What is the correct accept/reject decision for this project?
Based on the NPV, this project should be
-Select-acceptedrejectedItem 8 .
Calculate the MIRR for each project. Do not round intermediate calculations. Round your answers to two decimal places.
Truck: %
What is the correct accept/reject decision for this project?
Based on the MIRR, this project should be
-Select-acceptedrejectedItem 10 .
Pulley: %
What is the correct accept/reject decision for this project?
Based on the MIRR, this project should be
-Select-acceptedrejectedItem 12 .
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