A project has an initial cost of $65,000, expected net cash inflows of $12,000 per year for 10 years, and a cost of capital of 11%. What is the project's NPV? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to the nearest cent.
$
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:
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. Do not round intermediate calculations. Round the monetary values to the nearest dollar and percentage values to two decimal places. Use a minus sign to enter negative values, if any.
Truck Pulley
Value Decision Value Decision
IRR % -Select-AcceptRejectItem 2 % -Select-AcceptRejectItem 4
NPV $ -Select-AcceptRejectItem 6 $ -Select-AcceptRejectItem 8
MIRR % -Select-AcceptRejectItem 10 % -Select-AcceptRejectItem 12
Check My Work
