Refer to Vargas Products in E12-30A. Compute the IRR of each project and use this information to identify the better investment.

Data From E12-30A:-

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

• Project A costs \($280,000\) and offers eight annual net cash inflows of \($56,000\). Vargas Products requires an annual return of 16% on projects of this nature.

• Project B costs \($380,000\) and offers nine annual net cash inflows of \($74,000\). Vargas Products demands an annual return of 12% on investments of this nature.