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Edelman Engineering is considering including two pieces of equipment, a truck and an overhead pulley system, in this yea...

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

Calculate the IRR for each project. Do not round intermediate calculations. Round your answers to two decimal places.

Truck:   %

What is the correct accept/reject decision for this project?
Based on the IRR, this project should be -Select-acceptedrejectedItem 2 .

Pulley:   %

What is the correct accept/reject decision for this project?
Based on the IRR, this project should be -Select-acceptedrejectedItem 4 .

Calculate the NPV for each project. Do not round intermediate calculations. Round your answers to the nearest dollar. Use a minus sign to enter negative values, if any.

Truck: $  

What is the correct accept/reject decision for this project?
Based on the NPV, this project should be -Select-acceptedrejectedItem 6 .

Pulley: $  

What is the correct accept/reject decision for this project?
Based on the NPV, this project should be -Select-acceptedrejectedItem 8 .

Calculate the MIRR for each project. Do not round intermediate calculations. Round your answers to two decimal places.

Truck:   %

What is the correct accept/reject decision for this project?
Based on the MIRR, this project should be -Select-acceptedrejectedItem 10 .

Pulley:   %

What is the correct accept/reject decision for this project?
Based on the MIRR, this project should be -Select-acceptedrejectedItem 12 .

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Answer #1

Α B cash flows Truck -$15,000 $5,100 $5,100 $5,100 $5,100 $5,100 20.76% IRR(B3:38) Pulley -$21,000 $7,500 $7,500 $7,500 $7,50

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