Calculate the internal rate of return

Assignment Help Finance Basics
Reference no: EM133112655

Hello, kindly help me solve this problem about the NPV, IRR, and MIRR of independent projects.

Edelman Engineering plans to include two pieces of equipment - a forklift and a pulley system - in the current year's capital budget. They are independent projects. The truck will cost $ 17,100, and the pulley system will cost $ 22,430. The cost of capital is 14%. Here are the after-tax cash flows, including depreciation:

Year

Forklift

Pulley system

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 internal rate of return, net present value, and modified internal rate of return for the projects and indicate the correct accept/reject decision for each.

Reference book: 

Corporate Finance: A Focused Approach
by Ehrhardt and Brigham
Second Edition

Reference no: EM133112655

Questions Cloud

What is the before-tax cost of debt for olympic : One is a 5% coupon bond with a face value of $33 million, a maturity of 10 years, and a yield to maturity of 6%. What is the before-tax cost of debt for Olympic
What are the after tax proceeds : What are the after tax proceeds from the sale of the factory? (i.e., ATSV)? Round to nearest whole dollar value.
Determine the compensation expense at the end of year one : The grant-date fair value of an option with similar terms and conditions is P8.62. Determine the compensation expense at the end of year 1
How risk is avoided and managed in start-ups : Analyse and compare literature on how risk is avoided and managed in start-ups and Look at the existing literature on worldwide, as well as UK, mortgage
Calculate the internal rate of return : Edelman Engineering plans to include two pieces of equipment - a forklift and a pulley system - in the current year's capital budget. They are independent proje
Prepare journal entries for the transactions for january : Question - Prepare journal entries for the following transactions for January Year 2, using the letter of each transaction as a reference
Characteristics of competitive advantage : In deciding whether to invest abroad, management must first determine whether the ?rm has a sustainable competitive advantage that enables it to compete effecti
Assignment on confusion matrix : Assuming that we are running an experiment on Hong Kong tourists by showing them photos of the popular sights in Hong Kong and then asking them which the direct
What is minimum expected starting salary : Suppose that the post-graduation salary increases at a 5% per year and that the discount rate is 8%. What is minimum expected starting salary

Reviews

Write a Review

Finance Basics Questions & Answers

  Arbitrage insures that equal cash flows

Arbitrage insures that equal cash flows (of equal risk) sell at equal prices and unequal cash flows (of equal risk)

  How many years will you have to work before you retire

You have $50,000 in a retirement account, and you plan to deposit $3,000 at the end of every year until your account reaches $250,000.

  What is the value of its current stock price

What is the value of its current stock price? Assuming that the discount rate is 8%.

  Exogenous increase in the supply of money

Consider an exogenous increase in the supply of money. What is the effct of this increase on the rate of interset?

  What is the npv of the project

Production of the implants will require $1,530,000 in net working capital to start and additional net working capital investments each year equal to 20 percent.

  New-project analysis-campbell company

The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $810,000,

  Define the given statement according to the requirement

On the first toss, if the coin falls on heads, Shavit pays Maria $1 (and vice versa).

  Forward price of cad in terms of aud

What is the 1.5-yr forward price of CAD in terms of AUD?

  What is the value of this firm to its shareholders

The firm will only operate for one more year. What is the value of this firm to its shareholders?

  Coupon interest rate on the abc bond

Describe the two possible reasons why similar-risk bonds are currently earning a return below the coupon interest rate on the ABC bond.

  Analysis from the perspective

A written report on the study is also required to be submitted and should consist the following areas

  Advantages of monitoring employees

What are some of the advantages of monitoring employees? What are the potential risks of not doing so?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd