Two pieces of equipment-truck and overhead pulley system

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Reference no: EM13721930

If considering adding 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 $17,400, and that for the pulley system is $20,200. The firm's cost of capital is 13.50%. After-tax cash flows, including depreciation, are as follows:

Year Truck Pulley

1 $4,500 $9,300

2 $4,500 $9,300

3 $4,500 $9,300

4 $4,500 $9,300

5 $4,500 $9,300

Calculate NPV of truck project.

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Reference no: EM13721930

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