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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 $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.

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