Current Attempt in Progress

Sandhill Mills management is evaluating two alternative heating systems. Costs and projected energy savings are given in the following table. The firm uses 11.50 percent to discount such project cash flows.

Year		System 100		System 200
0		$1,618,500		$1,658,700
1		284,510		761,300
2		430,230		499,300
3		525,400		519,300
4		852,700		394,700

What is the NPV of the systems? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors and intermediate calculations. Round final answers to 0 decimal places, e.g. 5,275.)

NPV of system 100 is		$ ?
NPV of system 200 is		$ ?

Which system should be chosen?

Sandhill should choose

System 200 ?

System 100 ?

neither system ?

both systems ?