THIS The Management of Crane Manufacturing Company is evaluating two forklift systems to use in its plant
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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. Otis Forklifts Craigmore Forklifts Otis forklift Craigmore Forklifts Year O NPV Year 1 $-3,119,450 $971,225 $1,368,886 $-4,131,410 $862,236 $1,747,225 $351,158 $60,685 Year 2 Year 3 $2,124,497 $2,851,110 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%.) Otis forklift Craigmore Forklifts IRR % The investment decision is same % Is the investment decision different from the one determined by NPV? from the one determined by NPV. 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. Otis Forklifts Craigmore Forklifts Otis forklift Craigmore Forklifts Year O NPV Year 1 $-3,119,450 $971,225 $1,368,886 $-4,131,410 $862,236 $1,747,225 $351,158 $60,685 Year 2 Year 3 $2,124,497 $2,851,110 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%.) Otis forklift Craigmore Forklifts IRR % The investment decision is same % Is the investment decision different from the one determined by NPV? from the one determined by NPV.
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Otis forklift Initial investment3119450 Present value of cash flow Cash flow1rn At iRR Initial inves... View the full answer
Related Book For
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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