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 $17,100, and that for the pulley system is $22,430. The firm's cost of capital is 14%. 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
IRR %____
NPV $____
MIRR %____
Pulley
IRR %____
NPV $____
MIRR %____
Calc:-
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