Answered step by step
Verified Expert Solution
Question
1 Approved Answer
THIS e Your answer is partially correct. The Management of Crane Manufacturing Company is evaluating two forklift systems to use in its plant that produces
THIS
e Your answer is partially correct. The Management of Crane 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. Year 0 Year 1 Year 2 Year 3 Otis Forklifts $-3,119,450 $971,225 $1,368,886 $2,124,497 Craigmore Forklifts $-4,131,410 $862,236 $1,747,225 $2,851,110 NPV Otis forklift $351,158 Craigmore Forklifts $60,685 Compute the IRR for each of the two systems. (Round intermediate calculation to 0 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 same from the one determined by NPV
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started