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Edelman Engineering is considering including two pieces of equipment, a truck and an overhead pulley system,...

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 $17,100 and that for the pulley system is $22,430. 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

Calculate the IRR for each project. Do not round intermediate calculations. Round your answers to two decimal places.

Truck: ?? %

What is the correct accept/reject decision for this project?

Based on the IRR, this project should be [Accepted, Reject]

Pulley: ?? %

What is the correct accept/reject decision for this project?
Based on the IRR, this project should be [Accepted, Reject].

Calculate the NPV for each project. Do not round intermediate calculations. Round your answers to the nearest dollar. Use a minus sign to enter negative values, if any.

Truck: ?? %

What is the correct accept/reject decision for this project?
Based on the NPV, this project should be [Accepted, Reject].

Pulley: $ ?? %

What is the correct accept/reject decision for this project?
Based on the NPV, this project should be [Accepted, Reject].

Calculate the MIRR for each project. Do not round intermediate calculations. Round your answers to two decimal places.

Truck: ?? %

What is the correct accept/reject decision for this project?
Based on the MIRR, this project should be [Accepted, Reject].

Pulley: ??  %

What is the correct accept/reject decision for this project?
Based on the MIRR, this project should be  [Accepted, Reject].

After failing multiple attempts to do this myself, I resorted to using Chegg to help me get the answer and explain it. Thank you to whoever spends their time working it out for me.

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jeff jeffy answered 3 months ago
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