Question: 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.

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 percent. After-tax cash flows, including depreciation, are as follows:


Calculate the IRR, the NPV, and the MIRR for each project, and indicate the correct accept/reject decision for each.


Truck Year Pulley $5,100 $7,500 5,100 7,500 5,100 7,500 7,500 5,100 5,100 7,500

Truck Year Pulley $5,100 $7,500 5,100 7,500 5,100 7,500 7,500 5,100 5,100 7,500

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