Problem 10-8 NPVs, IRRs, and MIRRs for Independent Projects

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 $15,100, and that for the pulley system is $20,700. The firm's cost of capital is 16.75%. After-tax cash flows, including depreciation, are as follows:

YearTruckPulley

1$5,300$8,800

2$5,300$8,800

3$5,300$8,800

4$5,300$8,800

5$5,300$8,800

Calculate NPV of truck project and Pully project