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
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Truck NPV 17100 5100PVIFA 145 17100 510034331 17100 17509 409 Accept Financial calculator Input ... View full answer
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