Calculate the npv and the irr for each forklift

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Problem: Tracy Multinational Inc. has to decide between a gas-powered and an electric-powered forklift. The company will buy only one forklift. The gas-powered forklift costs $17,600 and has cash flows of $5,400 per year for 6 years. The electric-powered forklift will cost $22,100 and has cash flows of $6,190 per year for 6 years. The cost of capital is 10.57%. Calculate the NPV and the IRR for each forklift. Which one should the company select? Why? Calculate the profitability index for both. Which one should the company select? Why?

Reference no: EM133616050

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