JK Products, Inc. is considering investing in either of two competing projects that will allow the firm to

eliminate a production bottleneck and meet the growing demand for its products. The firm$$s engineering

department narrowed the alternatives down to two$--$ Status Quo $($SQ$)$ and High Tech $($HT$).$

Working with the accounting and finance personnel, the firm$$s CFO developed the following estimates

of the cash flows for SQ and HT over the relevant six$-$year time horizon. The firm has an $11$ percent

required return and views these projects as equally risky.

Project SQ Project HT

Initial Outlay $670,000940,000$

Years Cash Flows

$1250,000170,000$

$2200,000180,000$

$3170,000200,000$

$4150,000250,000$

$5130,000300,000$

a$.$ Calculate the Net Present Value $($NPV$)$ of each project, assess its acceptability, and indicate

which project is best, using NPV$.$

b$.$ Calculate the Internal Rate of Return $($IRR$)$ of each project, assess its acceptability, and indicate

which project is best, using IRR.

c$.$ Calculate the Profitability Index $($PI$)$ of each project, assess its acceptability, and indicate which

project is best, using PI$.$

d$.$ Calculate the Payback Period $($PP$)$ of each project, assess its acceptability, and indicate which

project is best, using PP