Problem 10-8(2) 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 $15,200, and that for the pulley system is $23,300. The firm's cost of capital is 16.25%. After-tax cash flows, including depreciation, are as follows:

YearTruckPulley

1$5,400$9,200

2$5,400$9,200

3$5,400$9,200

4$5,400$9,200

5$5,400$9,200

Calculate MIRR of truck project and Pully project