# 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 years capital budget

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
years capital budget. The projects are independent. The cash outlay for the truck is \$17,100 and that for the pulley system is \$22,430. The firms cost of capital
is 14%. 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 the IRR, the NPV, and the MIRR for each project, and indicate the correct accept-reject decision for each. (10-9) NPVs and IRRs for Mutually Exclusive
Projects Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its factory. Since both forklifts
perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less
expensive to operate; it will cost \$22,000, whereas the gas-powered truck will cost \$17,500. The cost of capital that applies to both investments is 12%. The life
for both types of truck is estimated to be 6 years, during which time the net cash flows for the electric-powered truck will be \$6,290 per year and those for the
gas-powered truck will be \$5,000 per year. Annual net cash flows include depreciation expenses. Calculate the NPV and IRR for each type of truck, and decide which

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