ABS, Inc. is considering two independent projects, A and B. Project A costs $95,000 and is expected to generate $65,000 in year one and $40,000 in year two. Project B costs $120,000 and is expected to generate $64,000 in year one, $17,000 in year two, and $55,000 in year three. ABS, Inc.'s required rate of return for these projects is 10%.

please answer 2 questions as they are companions. show your work

What is the profitability index for Project A and Project B? Which one(s) should be accepted? Why?

What is the internal rate of return of the Projects A and Project B? Which one(s) should be accepted? Why?