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 $21,000. The firm's cost of capital is 11%. 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 5,100 7,500 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- v % -Select- v $ NPV MIRR -Select- v -Select- v Activate Windows % -Select- v % -Select- v Go to Settings to activate Windows

Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and provide the following cash flows over the next five years: $88,000, 92,000, $91,000, $72,000, and $71,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel, see Appendix C.

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 $17,100, and that for the pulley system is $22,430. 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 5,100 7,500 5,100 7,500 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 % Аcсept % Reject %24 $ NPV -Select- V |-Select- v MIRR -Select- v % |-Select- v

Jacob’s 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 $39,500, and that for the pulley system is $94,800. The firm’s cost of capital is 14%. After-tax cash flows, including depreciation, are as follows:     Year Truck Pulley   1 $12,500 $31,000 2 12,500 31,000 3 12,500 31,000 4 12,500 31,000 5 12,500 31,000     Requirements: Calculate the IRR, the NPV, Payback and Discounted Payback Periods for each project and indicate the correct accept/reject decision for each.   2. You are the project manager for Becker Enterprises, LTD. and have been asked to analyze two alternatives for the company’s newest plastics The two alternatives, A and B, will perform the same task, but Alternative A will cost $80,000 to purchase while Alternative B will cost only $55,000. Moreover, the two alternatives…

Jason Corporation 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 Rs 17.1 million, and that for the pulley system is Rs 22.43 million. The firm’s cost of capital is 15 percent. After-tax cash flows, including depreciation, are as follows:  Year Truck Pulley     1 Rs in million 5.1 Rs in million $6.5 2 5.5 7.0 3 5.0 7.5 4 6.0 8.0 5 7.0 8.5 Required: Calculate for each: a) Internal Rate of Return, b) Net Present Value, c) Modified Internal Rate of Return, reinvestment rate is 10% d) Payback Period, e) Discounted Payback Period f) Indicate the correct accept/reject decision for each project.

abc Inc., is considering two projects. Each requires an initial investment of $100,000. John Proton, president of the company, has set a maximum payback period of 4 years. The after-tax cash inflows associated with each project are shown in the following table. Cash inflows (CF,) Year Project A Project B $10,000 $40,000 2. 20,000 30,000 3 30,000 20,000 4 40,000 10,000 5 20,000 20,000 Compute the payback period of each project. Which should the company invest in, firstly, what if the projects are independent? Secondly, what if the projects are mutually exclusive? Please support your recommendations of project investment with own interpretations.

Pencil, Inc., has a large crane that cost P35,000 when purchased ten years ago. Depreciation taken to date totals P25,000. The crane can be sold now for P6,000. Assuming a tax rate of 40%, if the crane is sold the total after-tax cash inflow for capital budgeting purposes will be:

A firm with a 14% WACC is evaluating two projects for this year’s capital budget. After-tax cash flows, including depreciation, are as follows: Project A, IRR = 19.86% and Project B, IRR = 16.80%     Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Project A -$6,000 $2,000 $2,000 $2,000 $2,000 $2,000 Project B -$18,000 $5,600 $5,600 $5,600 $5,600 $5,600   a) Calculate NPV, payback, and discounted payback for each project. b) Assuming the projects are independent, which one(s) would you recommend? c) If the projects are mutually exclusive, which would you recommend? d) Notice that the projects have the same cash flow timing pattern. Why is there a conflict between NPV and IRR?

Stockinger Corporation has provided the following information concerning a capital budgeting project: $ 314,000 4 $0 Investment required in equipment Expected life of the project Salvage value of equipment Annual sales Annual cash operating expenses Working capital requirement One-time renovation expense in year 3 The company's income tax rate is 30% and its after-tax discount rate is 11%. The working capital would be required immediately and would be released for use elsewhere at the end of the project. The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting. The total cash flow net of income taxes in year 3 is: Multiple Choice O O O $91,450 $97,000 $57,000 $ 665,000 $ 471,000 $ 30,000 $ 97,000 $137,000

Stockinger Corporation has provided the following information concerning a capital budgeting project:   Investment required in equipment $ 296,000 Expected life of the project 4 Salvage value of equipment $ 0 Annual sales $ 620,000 Annual cash operating expenses $ 444,000 Working capital requirement $ 30,000 One-time renovation expense in year 3 $ 88,000   The company’s income tax rate is 30% and its after-tax discount rate is 11%. The working capital would be required immediately and would be released for use elsewhere at the end of the project. The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.   The total cash flow net of income taxes in year 3 is: