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 $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 -Select- Pulley: What is the correct accept/reject decision for this project? Based on the IRR, this project should be -Select- 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 -sSelect- Pulley: $ What is the correct accept/reject decision for this project? Based on the NPV, this project should be -Select- v 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 Select- Pulley: What is the correct accept/reject decision for this project? Based on the MIRR, this project should be -Select-
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 $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 -Select- Pulley: What is the correct accept/reject decision for this project? Based on the IRR, this project should be -Select- 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 -sSelect- Pulley: $ What is the correct accept/reject decision for this project? Based on the NPV, this project should be -Select- v 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 Select- Pulley: What is the correct accept/reject decision for this project? Based on the MIRR, this project should be -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...
Related questions
Question
![NPVS, IRRS, and MIRRS for Independent Projects
Edelman Engineering is considering including tvwo 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
$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 -Select-
Pulley:
%
What is the correct accept/reject decision for this project?
Based on the IRR, this project should be -Select-
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 -Select-
Pulley: $
What is the correct accept/reject decision for this project?
Based on the NPV, this project should be -Select-
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 -Select-
Pulley:
%
What is the correct accept/reject decision for this project?
Based on the MIRR, this project should be -Select-](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4f7e355e-7cb0-49d4-b86f-52e699a97a79%2F36bf9cfc-2da6-4443-a5d2-53ef3359317a%2Fu0qpnpe_processed.jpeg&w=3840&q=75)
Transcribed Image Text:NPVS, IRRS, and MIRRS for Independent Projects
Edelman Engineering is considering including tvwo 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
$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 -Select-
Pulley:
%
What is the correct accept/reject decision for this project?
Based on the IRR, this project should be -Select-
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 -Select-
Pulley: $
What is the correct accept/reject decision for this project?
Based on the NPV, this project should be -Select-
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 -Select-
Pulley:
%
What is the correct accept/reject decision for this project?
Based on the MIRR, this project should be -Select-
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 6 steps with 3 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
![EBK CONTEMPORARY FINANCIAL MANAGEMENT](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
![EBK CONTEMPORARY FINANCIAL MANAGEMENT](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT