Question

NPVs, IRRs, and MIRRs for Independent Projects

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 $15,000, and that for the pulley system is $21,000. The firm's cost of capital is 11%. 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, the NPV, and the MIRR for each project, and indicate the correct accept/reject decision for each. Do not round intermediate calculations. Round the monetary values to the nearest dollar and percentage values to two decimal places. Use a minus sign to enter negative values, if any.

	Truck			Pulley
	Value	Decision		Value	Decision
IRR	%	-Select-AcceptRejectItem 2		%	-Select-AcceptRejectItem 4
NPV	$	-Select-AcceptRejectItem 6		$	-Select-AcceptRejectItem 8
MIRR	%	-Select-AcceptRejectItem 10		%	-Select-AcceptRejectItem 12

Answer 1