Premium Manufacturing Company is evaluating two 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. If the company uses a 10 percent discount rate for all projects, determine which forklift system should be purchased using the net present value (NPV) approach. Also, Compute the IRR and Payback Period for each of the two systems. System 1 System 2 Year 0 Year 1 Year 2 $1,358,886 -$4,123,450 $1,979,225 -$5,137,410 $1,875,236 $1,765,225 Year 3 $2,111,497 $2,865,110

Premium Manufacturing Company is evaluating two 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. If the company uses a 10 percent discount rate for all projects, determine which forklift system should be purchased using the net present value (NPV) approach. Also, Compute the IRR and Payback Period for each of the two systems. System 1 System 2 Year 0 Year 1 Year 2 $1,358,886 -$4,123,450 $1,979,225 -$5,137,410 $1,875,236 $1,765,225 Year 3 $2,111,497 $2,865,110

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Description: Premium Manufacturing Company is evaluating two systems to use in its plant that produces thetowers for a windmill power farm. The costs and the cash flows from these systems are shownbelow. If the company uses a 10 percent discount rate for all pro

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 10PA: The Ham and Egg Restaurant is considering an investment in a new oven that has a cost of $60,000,...

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