Cotter Manufacturing is considering investing in new technology which will reduce manufacturing costs in future years. There are three possible types of technology called BX124R or BX125R. Regardless of which technology is chosen (if chosen at all), the initial cost will be $3,500,000. The life of either technology is expected to be 5 years. The projected cost savings (cash flows) from BX124R are listed as follows: Year 1: $1,500,000; Year 2: $1,800,000; Year 3: $950,000; Year 4: $1,975,000; Year 5: $1,300,000. The projected cost savings (cash flows) from BX125R are listed as follows: Year 1: $900,000; Year 2: $600,000; Year 3: $570,000; Year 4: $1,075,000; Year 5: $3,000,000. Cotters cost of capital is 8%.

1) Calculate the NPV BX124R and BX125R.

2) Compute each the IRR for BX124R and BX125R.

3) Calculate the projects payback period for BX124R and BX125R.

4) As the management accountant, would you recommend an investment in this technology (if the projects were independent)? What if the projects were mutually exclusive?