Assignment:
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 percent. 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, the NPV, and the MIRR for each project, and indicate the correct accept/reject decision for each.
Your answer must be, typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.