The Management of Cullumber Manufacturing Company is evaluating two forklift systems to use in its...
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Accounting
The Management of Cullumber 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 11 percent discount rate for all projects.
Year 0
Year 1
Year 2
Year 3
Otis Forklifts
$-3,104,450
$961,225
$1,358,886
$2,114,497
Craigmore Forklifts
$-4,123,410
$893,236
$1,754,225
$2,862,110
NPV
Otis forklift
$410,522
Craigmore Forklifts
$197,825
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%.)
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