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Problem 10-08 NPVs, IRRs, and MIRRs for Independent Projects Edelman Engineering is considering including two pieces...
Problem 10-08
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 $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 | ||
-
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?
-
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?
-
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?
Solutions
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Problem 10-08 NPVs, IRRs, and MIRRs for Independent Projects Edelman Engineering is considering including two pieces...
Problem 10-08 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...
Problem 10-8 NPVs, IRRs, and MIRRs for Independent Projects Edelman Engineering is considering including two pieces...
Problem 10-8
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 $15,000, and that for the pulley system is $21,000.
The firm's cost of capital is 11%. 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...
NPVs, IRRs, and MIRRs for Independent Projects Edelman Engineering is considering including two pieces of equipment,...
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
$15,000 and that for the pulley system is $21,000. The firm's cost
of capital is 11%. 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...
NPVs, IRRs, and MIRRs for Independent Projects Edelman Engineering is considering including two pieces of equipment,...
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 $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...
NPVs, IRRs, and MIRRs for Independent Projects Edelman Engineering is considering including two pieces of equipment,...
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 $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...
NPVs, IRRs, and MIRRs for Independent Projects Edelman Engineering is considering including two pieces of equipment,...
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 $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...
NPVs, IRRs, and MIRRs for Independent Projects Edelman Engineering is considering including two pieces of equipment,...
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 $15,000 and that for the pulley system is $21,000. The
firm's cost of capital is 11%. 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...
NPVs, IRRs, and MIRRs for Independent Projects Edelman Engineering is considering including two pieces of equipment,...
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 $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...
10-8. Edelman Engineering is considering including two pieces of equipment, a truck and an overhead pulley...
10-8. 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 $39,500, and that for the pulley system is $94,800.
The firm's cost of capital is 14%. After-tax cash flows, including
depreciation, are as follows:
Year
Truck
Pulley
1
$12,500
$31,000
2
12,500
31,000
3
12,500
31,000
4
12,500
31,000
5
12,500
31,000
Calculate the IRR, the NPV,...
Edelman Engineering is considering including two pieces of equipment, a truck and an overhead pulley...
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 for the pulley
system it is $22,430. The firm’s cost of capital is 14%. After tax
cash flows 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 ...
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