FIN 515 – Davis Industries has to decide between a gas vs. electric powered
January 11th, 2018
Davis Industries has to decide between a gas vs. electric powered forklift truck. The electric powered truck will cost $22,000 where as gas powered truck costs $17,500. The cost of capital is 12%. The life of both the trucks is 6 years. The net cash-flows from electric powered truck will be $6,290 per year and $5,000 for the gas powered truck. The firm will choose only one of these trucks. Calculate NPV and IRR for each truck and make your recommendation.