FIN – Edelman Engineering is considering

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 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 2 5,100 7,500 3 5,100 7,500 4 5,100 7,500 5 5,100 7,500 Calculate and interpret the following.