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:Â Â %
What is the correct accept/reject decision for this project?
-Select-AcceptRejectItem 2
Pulley:Â Â %
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: $Â Â
What is the correct accept/reject decision for this project?
-Select-AcceptRejectItem 6
Pulley: $Â Â
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:Â Â %
What is the correct accept/reject decision for this project?
-Select-AcceptRejectItem 10
Pulley:Â Â %
What is the correct accept/reject decision for this project?
-Select-AcceptRejectItem 12
