Wildhorse 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 7 percent discount rate for production systems.

Year 0 1 2 3 System 1 -$15,080 15,294 15,294 15,294 IRR of system 1 is Which has the higher IRR? System 2 -$47,448 33,300 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%.) 33,300 33,300 NPV of system 1 is $ has higher IRR. % and IRR of system 2 is 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? %. and NPV of system 2 $