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Pharoah Incorporated management is considering investing in two alternative production systems. The systems are mutually exclusive, and the cost of the new equipment and the resulting cash flows are shown in the accompanying table. The firm uses a 10 percent discount rate for production system projects. Year System1 System2 0 -$12,500 $-45,100 1 $12,500 $30,800 2 12,500 30,800 3 12500 30800 what is the NPV for both Systems?

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Pharoah Incorporated management is considering investing in two alternative

production systems. The systems are mutually exclusive, and the cost of the new equipment and the resulting cash flows are shown in the accompanying table. The firm uses a 10 percent discount rate for production system projects.

Year System1 System2

0 -$12,500 $-45,100

1 $12,500 $30,800

2 12,500 30,800

3 12500 30800

what is the NPV for both Systems?

 
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