NPV Versus IRR

Covington Pharmacies has decided to automate its insurance claims process. Two networked computer systems are being considered. The systems have an expected life of two years. The net cash flows associated with the systems are as follows. The cash benefits represent the savings created by switching from a manual to an automated system.

Year	System I	System II
0	$(120,000)	$(120,000)
1	-	76,628
2	162,708	76,628

The companys cost of capital is 10 percent.

The present value tables provided in Exhibit 19B.1 and Exhibit 19B.2 must be used to solve the following problems.

Required:

1. Compute the NPV and the IRR for each investment. If required, round intermediate calculations and NPV to the nearest dollar and round IRR percentages to one decimal place (for example, 15.68% rounds to 15.7% and should be entered as "15.7" in the answer box).

		System I			System II
NPV	$fill in the blank 1			$fill in the blank 2
IRR	fill in the blank 3		%	fill in the blank 4		%