The Management of Cullumber Manufacturing Company

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 9 percent discount
rate for all projects.

Year 0 Year 1 Year 2 Year 3
Otis Forklifts §-3,136.450 $991,225 $1,371,586 $2,098,497

Craigmore Forklifts $-4.156,410 $859,236 $1,779,225 $2,862,110

NPV
Otis forklift $548,045

Craigmore Forklifts $339,499

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%.)

Otis forklift Ee

Craigmore Forklifts %

Is the investment decision different from the one determined by NPV?

The investment decision is w | from the one determined by NPV.