Sheridan 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			-$14,770			-$49,284
1			14,816			33,420
2			14,816			33,420
3			14,816			33,420

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%.)

Which has the higher IRR?

Compute the NPV for both production system 1 and production system 2. (Do not round intermediate calculations. Round answers to 2 decimal places, e.g. 15.25.) Which production system has the higher NPV?