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The Management of Blossom Manufacturing Company is evaluating two forklift systems to use in its plant that produces the towers for a windmill power farm.
The Management of Blossom Manufacturing Company is evaluating two forklift systems to use in its plant that produces the towers for a windmill power farm. The costs and the cash flows from these systems are shown below. The company uses a 12 percent discount rate for all projects. Otis Forklifts Craigmore Forklifts Year 0 $-3,112,450 $-4,157,410 Year 1 $984,225 $868,236 Year 2 $1,347,886 $1,778,225 Year 3 $2,101,497 $2,879,110 Otis forklift Craigmore Forklifts NPV $336,652 $84,685 Compute the IRR for each of the two systems. (Round intermediate calculation to decimal places, e.g. 1,525 and final answers to 2 decimal places, e.g. 15.10%.) IRR Otis forklift % Craigmore Forklifts % Is the investment decision different from the one determined by NPV? The investment decision is from the one determined by NPV
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