Refer to McKnight Products in E12-51B. Compute the IRR of each project and use this information to identify the better investment.

Data From E12-51B:-

Use the NPV method to determine whether McKnight Products should invest in the following projects:

• Project A costs \($265,000\) and offers seven annual net cash inflows of \($65,000\).

McKnight Products requires an annual return of 16% on projects of this nature.

• Project B costs \($385,000\) and offers nine annual net cash inflows of \($72,000.\) McKnight Products demands an annual return of 12% on investments of this nature.