Pharoah 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 8 percent discount rate for production systems.

Year			System 1			System 2
0			-$12,310			-$46,130
1			12,397			31,360
2			12,397			31,360
3			12,397			31,360

Compute the IRR for both production system 1 and production system 2. (Do not round intermediate calculations. Round answers to 2 decimal places, e.g. 15.25%.)

IRR of system 1 is ____________ % and IRR of system 2 is enter the IRR of System 2 _________ %.

Which has the higher IRR?

___________ has higher IRR.