Question 1

NPV

A project has an initial cost of $40,300, expected net cash inflows of $9,000 per year for 11 years, and a cost of capital of 11%. What is the project's NPV? (Hint:Begin by constructing a time line.) Do not round your intermediate calculations. Round your answer to the nearest cent.

Question 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 $18,000 and that for the pulley system is $22,000. The firm's cost of capital is 14%. After-tax cash flows, including depreciation, are as follows:

YearTruckPulley1$5,100$7,50025,1007,50035,1007,50045,1007,50055,1007,500

1. Calculate the IRR for each project. Round your answers to two decimal places.
2. Truck:%

Pulley:%

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: $

Pulley: $

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

Truck:%

Pulley:%