11) NPVs, IRRs, and MIRRs for Independent Projects Edelman Engineering is considering including two pieces of equipment,...
Question:
11)
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 $18,000 and that for the pulley system is $22,000. The firm's cost of capital is 14%. After-tax cash flows, including depreciation, are as follows:
YearTruckPulley1$5,100$7,50025,1007,50035,1007,50045,1007,50055,1007,500
A- Calculate the IRR for each project. Round your answers to two decimal places.
-Truck:%
What is the correct accept/reject decision for this project?
-Pulley:%
What is the correct accept/reject decision for this project?
B- Calculate the NPV for each project. Round your answers to the nearest dollar, if necessary. Enter each answer as a whole number. For example, do not enter 1,000,000 as 1 million.
-Truck: $
What is the correct accept/reject decision for this project?
-Pulley: $
What is the correct accept/reject decision for this project?
C- Calculate the MIRR for each project. Round your answers to two decimal places.
Truck:%
What is the correct accept/reject decision for this project?
-Pulley:%
What is the correct accept/reject decision for this project?
Expert Answer:
