Pure Technology, 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 tow 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 6-year time horizon.

The firm has an 11 percent required return and views these projects as equally risky.

	Project SQ	Project HT
Year	Cash Flows	Cash Flows
0	-$570 000	-$840 000
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
6	130 000	550 000

Calculate the net present value (NPV) of each project, assess its acceptability, and indicate which project is best using NPV.

• Calculate the internal rate of return (IRR) of each project, assess its acceptability, and indicate which project is best using IRR.

• Which of the two mutually exclusive projects would you recommend Pure Technology to undertake?

The NPV of the project SQ is equal: $ (round to the nearest whole number)

The NPV of the project HT is equal: $ (round to the nearest whole number)

The IRR of the project SQ is equal: % (round 1 digit after decimal point)

The IRR of the project HT is equal: % (round 1 digit after decimal point)

I recommend Pure Technology to undertake the project: (fill in the blanks HT or SQ)