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Edelman Engineering is considering including two pieces of equipment a truck and an overhead pulley system in this years capital budget The projects are independent The cash outlay for the truck

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 $15,000, and that for the pulley system is $20,900. The firm's cost of capital is 14.75%. After-tax cash flows, including depreciation, are as follows:

Year Truck Pulley

1    $5,250 $8,100   

2   $5,250 $8,100   

3    $5,250 $8,100   

4    $5,250   $8,100   

5   $5,250 $8,100   

Calculate MIRR of truck project and Pully project

Answer is either:

a). 22.53% and 19.80%

b).18.62% and 21.06%

c). 16.94% and 24.85%

d). 18.62% and 20.22%

e). 14.52% and 21.48%

 

Apr 08 2020 View more View Less

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