Blossom Incorporated management is considering investing in two alternative production systems. The systems are mutually exclusive, and the cost of the new equipment and the resulting cash flows are shown in the accompanying table. The firm uses a 7 percent discount rate for production systems

Year	System 1	System 2
0	-$12,730	-$44,975
1	12,745	30,140
2	12,745	30,140
3	12,745	30,140

What is the IRR for both systems?

IRR of system 1 is _____ %

IRR of system 2 is _____ %

Which has the higher IRR?

Compute the NPV for both production system 1 and production system 2.

NPV of system 1 is $_____

NPV of system 2 is $_____

Which production has the higher NPV?