Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Davis Industries must choose between a gas - powered and an electric - powered forklift truck for moving materials in its factory. Because both forklifts
Davis Industries must choose between a gaspowered and an electricpowered forklift truck for moving materials in its factory. Because both forklifts perform the same function, the firm will choose only one. They are mutually exclusive investments. The electricpowered truck will cost more, but it will be less expensive to operate; it will cost $ whereas the gaspowered truck will cost $ The cost of capital that applies to both investments is The life for both types of truck is estimated to be years, during which time the net cash flows for the electricpowered truck will be $ per year, and those for the gaspowered truck will be $ per year. Annual net cash flows include depreciation expenses. Calculate the NPV and IRR for each type of truck, and decide which to recommend. Do not round intermediate calculations. Round the monetary values to the nearest dollar and percentage values to two decimal places.
Electricpowered forklift truck: NPV $ IRR $
Gaspoweredforklift truck: NPV $ IRR $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started