1. Oh SNAP 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 firms engineering department narrowed the alternatives down to two-- Status Quo (SQ) and High Tech (HT).

Working with the accounting and finance personnel, the firms 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	670,000	940,000
Years	Cash Flows
1	250,000	170,000
2	200,000	180,000
3	170,000	200,000
4	150,000	250,000
5	130,000	300,000

1. Calculate the Net Present Value (NPV) of each project, assess its acceptability, and indicate which project is best, using NPV.

2. Calculate the Internal Rate of Return (IRR) of each project, assess its acceptability, and indicate which project is best, using IRR.
3. Calculate the Profitability Index (PI) of each project, assess its acceptability, and indicate which project is best, using PI.
4. Calculate the Payback Period (PP) of each project, assess its acceptability, and indicate which project is best, using PP.