Problem 10-01

NPV

A project has an initial cost of $39,275, expected net cash inflows of $12,000 per year for 12 years, and a cost of capital of 10%. What is the project's NPV? (Hint:Begin by constructing a time line.) Do not round your intermediate calculations. Round your answer to the nearest cent.

Problem 10-08

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 $15,000 and that for the pulley system is $21,000. The firm's cost of capital is 11%. 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

1. Calculate the IRR for each project. Round your answers to two decimal places.

a. Truck:

b. pulley:

2.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

a. Truck:

b. Pulley:

3.Calculate the MIRR for each project. Round your answers to two decimal places

a. Truck:

b. Pulley: