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-
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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-
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