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:
Year X Y
0 $ -1000 $ -1000
1 $100 $1,000
2 $300 $100
3 $400 $50
4 $700 $50