Problem:
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 $19,000, and that for the pulley system is $20,000. Project A is the truck and Projct B is the pulley. The firm's cost of capital is 12 percent. 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
|
Calculate 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.
Calculate MIRR for each project. Round the answers to the nearest hundredth.