Current Attempt in Progress

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 system projects.

Year			System 1			System 2
0			-$13,200			-$44,200
1			13,200			33,400
2			13,200			33,400
3			13,200			33,400

Calculate NPV. (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round answers to 2 decimal places, e.g. 15.25.)

NPV of System 1 is $enter the NPV of System 1 in dollars rounded to 2 decimal places and NPV of System 2 is $enter the NPV of System 2 in dollars rounded to 2 decimal places .

In which system should the firm invest?

The firm should invest in select a system System 1System 2.