NPV, IRR, MIRR
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Free InquiryEdelman 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:
Year
Truck
Pulley
1
$5,100
$7,500
2
5,100
7,500
3
5,100
7,500
4
5,100
7,500
5
5,100
7,500
a. Calculate the IRR for each project. Round your answers to two decimal places.
Truck: ____ %
What is the correct accept/reject decision for this project?
Pulley: _____ %
What is the correct accept/reject decision for this project?
b. Calculate the NPV for each project. Round your answers to the nearest dollar, if necessary. Enter each answer as a whole number. For example, do not enter 1,000,000 as 1 million.
Truck: _____$
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?
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