Intermediate Financial Management
Intermediate Financial Management
14th Edition
ISBN: 9780357516782
Author: Brigham, Eugene F., Daves, Phillip R.
Publisher: Cengage Learning
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Chapter 12, Problem 8P

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:

Chapter 12, Problem 8P, Edelman Engineering is considering including two pieces of equipment, a truck and an overhead pulley

Calculate the IRR, the NPV, and the MIRR for each project, and indicate the correct accept/reject decision for each.

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