Considering including two pieces of equipment

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Reference no: EM131451351

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 $17,600, and that for the pulley system is $20,000. The firm's cost of capital is 12.50%. After-tax cash flows, including depreciation, are as follows:

Year Truck Pulley

1 $5,450 $9,100

2 $5,450 $9,100

3 $5,450 $9,100

4 $5,450 $9,100

5 $5,450 $9,100

Calculate NPV of truck project and Pully project.

Reference no: EM131451351

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