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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.

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 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
  1. Calculate the IRR for each project. Round your answers to two decimal places.

    Truck: % What is the correct accept/reject decision for this project? -Select-AcceptRejectItem 2

    Pulley: % What is the correct accept/reject decision for this project? -Select-AcceptRejectItem 4

  2. Calculate the NPV for each project. Round your answers to the nearest dollar, if necessary. Enter each answer as a whole number. For example, do not enter 1,000,000 as 1 million.

    Truck: $ What is the correct accept/reject decision for this project? -Select-AcceptRejectItem 6

    Pulley: $ What is the correct accept/reject decision for this project? -Select-AcceptRejectItem 8

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 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
  1. Calculate the IRR for each project. Round your answers to two decimal places.

    Truck: % What is the correct accept/reject decision for this project? -Select-AcceptRejectItem 2

    Pulley: % What is the correct accept/reject decision for this project? -Select-AcceptRejectItem 4

  2. Calculate the NPV for each project. Round your answers to the nearest dollar, if necessary. Enter each answer as a whole number. For example, do not enter 1,000,000 as 1 million.

    Truck: $ What is the correct accept/reject decision for this project? -Select-AcceptRejectItem 6

    Pulley: $ What is the correct accept/reject decision for this project? -Select-AcceptRejectItem 8

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