Question: Huano Inc. is considering two mutually exclusive projects, A and B. Project A cost $95,000 and Ian expected to generate $65,000 in one year and

Huano Inc. is considering two mutually exclusive projects, A and B. Project A cost $95,000 and Ian expected to generate $65,000 in one year and $75,000 in year two. Project B cost $120,000 and is expected to generate $64,000 in year one, $67,000 in year two, $56,000 in year three, and $45,000 in year four. Huano, Inc required rate for return these projects is 10%.

The internal rate of return for Project A is:

The net present value for Project A is:

The net present value for Project B is:

Based on the criteria calculated, Huano Inc should accept:

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