help in homework

New User?

Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Davis Industries must choose between a gas- powered and an electric-Powered forklift truck for moving materials in its factory

Davis Industries must choose between a gas- powered and an electric-Powered forklift truck for moving materials in its factory

Finance

Davis Industries must choose between a gas- powered and an electric-Powered forklift truck for moving materials in its factory. Since both forklifts perform the same function, the firm will choose only one. (they are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost $22,000, wheras the gas-powered truck will cost $17,500. The cost of capital that applies to both investments is 12%. The life for both types of truck is estimated to be 6 years, during which time the net cash flows for the electric-powered truck will be$6,290 per year and those for the gas-powered truck will be $5,000 per year. Annual net cash flows include depreciation expenses. Calculate the NPV andIRR for each type of truck, and decide which to recommend.

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

Answer:

Note: Basing on the NPV decision rule, the Electric-powered truck has got highest and postive Net Present Value (NPV). Hence, i recommended to Electric-powered truck.

please use this google drive link to download the answer file.

https://drive.google.com/file/d/1IhfERirw8famJuWpvp-D4XTEwjcfxArE/view?usp=sharing

note: if you have any trouble in viewing/downloading the answer from the given link, please use this below guide to understand the whole process.

https://helpinhomework.org/blog/how-to-obtain-answer-through-google-drive-link

Sitejabber (5.0)

BBC (5.0)

Trustpilot (4.9)

Google (5.0)