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Npvs-irrs and mirrs for independent projects

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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 $19,000 and that for the pulley system is $20,000. The firm's cost of capital is 12%. 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.
  2. Truck: ______  %
  3. What is the correct accept/reject decision for this project?
  4. Accept or Reject?
  5. Pulley: ______%
  6. What is the correct accept/reject decision for this project?
  7. Accept or Reject?
  8. 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.
  9. Truck: ______$
  10. What is the correct accept/reject decision for this project?
  11. Accept or Reject?
  12. Pulley: _______%
  13. What is the correct accept/reject decision for this project?
  14. Accept or Reject?
  15. Calculate the MIRR for each project. Round your answers to two decimal places.
  16. Truck: _______ %
  17. What is the correct accept/reject decision for this project?
  18. Accept or Reject?
  19. Pulley: _______%
  20. What is the correct accept/reject decision for this project?
  21. Accept or Reject?

Reference no: EM132203648

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