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 10 percent discount rate for production system projects.

Year			System 1			System 2
0			-$12,500			-$45,100
1			12,500			30,800
2			12,500			30,800
3			12,500			30,800

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.)

In which system should the firm invest?

Question 3 View Policies Current Attempt in Progress 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 10 perce discount rate for production system projects. Year System 1 System 2 0 1 - $12,500 12,500 $45,100 30,800 12,500 30,800 12,500 30.800 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 $ and NPV of System 2 is $ In which system should the firm invest? The firm should invest in