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LoPat Construction is considering including two pieces of equipment, a truck and a scissor lift, in this year's capital budget. Both projects are independent. The
LoPat Construction is considering including two pieces of equipment, a truck and a scissor lift, in this year's capital budget. Both projects are independent. The cash outlay for the truck is $49,500, and that for the pulley system is $104,500. The firm's cost of capital is 12%. After-tax cash flows, including depreciation, are as follows: Requirements: Calculate the NPV, IRR and PI for each project and indicate the correct accept/reject decision for each criteria. (Marks: 12)
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