NPVs, IRRs, and MIRRs for Independent Projects Edelman Engineering is considering including two pieces of equipment, a...

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Accounting

NPVs, IRRs, and MIRRs for Independent Projects
Edelman Engineering is considering including two pieces ofequipment, a truck and an overhead pulley system, in this year'scapital budget. The projects are independent. The cash outlay forthe truck is $15,000 and that for the pulley system is $21,000. Thefirm's cost of capital is 11%. After-tax cash flows, includingdepreciation, 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. Round your answers to twodecimal places.
Truck:  %

What is the correct accept/reject decision for this project?
-Select-AcceptRejectItem 2

Pulley:  %

What is the correct accept/reject decision for this project?
-Select-AcceptRejectItem 4

Calculate the NPV for each project. Round your answers to thenearest 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?
-Select-AcceptRejectItem 6

Pulley: $

What is the correct accept/reject decision for this project?
-Select-AcceptRejectItem 8

Calculate the MIRR for each project. Round your answers to twodecimal places.
Truck:  %

What is the correct accept/reject decision for this project?
-Select-AcceptRejectItem 10

Pulley:  %

What is the correct accept/reject decision for this project?
-Select-AcceptRejectItem 12

Answer & Explanation Solved by verified expert

3.9 Ratings (412 Votes)

a Computations of IRR using excel A B C 1 Year Cash FlowTruck Cash Flow Pulley 2 0 15000 21000 3 1 5100 7500 4 2 5100 7500 5 3 5100 7500 6 4 5100 7500 7 5 5100 7500 8 IRR 2076 2306 Suppose the excel sheet looks like above table Insert formula in cell B8 as IRRB2B7 to get IRR for the project Truck as 2076 Similarly to get IRR of Pulley inset formula IRRC2C7 in cell C8 which will display IRR as 2306 IRR for Truck See Answer

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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