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The Management of Oriole Manufacturing Company is evaluating two forklift systems to use in its plant that produces the towers for a windmill power farm.
The Management of Oriole 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 10 percent discount rate for all projects. Otis Forklifts Craigmore Forklifts Year o $-3,142,450 $-4,121,410 Year 1 $963,225 $892,236 Year 2 $1,366,886 $1,760,225 Year 3 $2,118,497 $2,876,110 NPV Otis forklift Craigmore Forklifts $454,525 $305,309 Compute the IRR for each of the two systems. (Round intermediate calculation to O 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 v from the one determined by NPV
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