Which system should the firm invest

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Reference no: EM132809604

Net present Value:

Year System 1 System 2

-15,000 -45,000

1 15,000 32,000

2 15,000 32,000

3 15,000 32,000

Problem 1: Blanda Incorporated mangement 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. If the firm uses a 9 percent discount rate for their production systems, in which system should the firm invest?

Reference no: EM132809604

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