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 NM 2 5,100 7,500 3 5,100 7,500 45 5,100 5,100 7,500 7,500 Calculate the IRR, the NPV, and the MIRR for each project, and indicate the correct accept/reject decision for each. Do not round intermediate calculations. Round the monetary values to the nearest dollar and percentage values to two decimal places. Use a minus sign to enter negative values, if any. IRR NPV EA $ MIRR Truck Value Decision 90 % -Select- ▼ -Select- ✔ % -Select- ✔ 69 Pulley Value Decision % -Select- ✔ -Select- ▼ % -Select- ✓
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 NM 2 5,100 7,500 3 5,100 7,500 45 5,100 5,100 7,500 7,500 Calculate the IRR, the NPV, and the MIRR for each project, and indicate the correct accept/reject decision for each. Do not round intermediate calculations. Round the monetary values to the nearest dollar and percentage values to two decimal places. Use a minus sign to enter negative values, if any. IRR NPV EA $ MIRR Truck Value Decision 90 % -Select- ▼ -Select- ✔ % -Select- ✔ 69 Pulley Value Decision % -Select- ✔ -Select- ▼ % -Select- ✓
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 8P: Edelman Engineering is considering including two pieces of equipment, a truck and an overhead pulley...
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![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
NM
2
5,100
7,500
3
5,100
7,500
45
5,100
5,100
7,500
7,500
Calculate the IRR, the NPV, and the MIRR for each project, and indicate the correct accept/reject decision for each. Do not round intermediate calculations. Round the
monetary values to the nearest dollar and percentage values to two decimal places. Use a minus sign to enter negative values, if any.
IRR
NPV
EA
$
MIRR
Truck
Value
Decision
90
%
-Select- ▼
-Select- ✔
%
-Select- ✔
69
Pulley
Value
Decision
%
-Select- ✔
-Select- ▼
%
-Select- ✓](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcfab34e0-2bc3-495e-ad9c-746b530410a2%2F50a3cd05-f1f7-4c26-a132-e4f23e072b6c%2Fpopth1_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
NM
2
5,100
7,500
3
5,100
7,500
45
5,100
5,100
7,500
7,500
Calculate the IRR, the NPV, and the MIRR for each project, and indicate the correct accept/reject decision for each. Do not round intermediate calculations. Round the
monetary values to the nearest dollar and percentage values to two decimal places. Use a minus sign to enter negative values, if any.
IRR
NPV
EA
$
MIRR
Truck
Value
Decision
90
%
-Select- ▼
-Select- ✔
%
-Select- ✔
69
Pulley
Value
Decision
%
-Select- ✔
-Select- ▼
%
-Select- ✓
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