Compose a memo to the board of directors that makes a recommendation as to which project should be adopted. Your memo should include the following: 1. A brief description of the two projects/clients. 2. A brief summary of the financial characteristics of the two projects (NPV and IRR). 3. A recommendation as to which project should be accepted based on AFC's desire to diversify their business to be less dependent on automotive clients.** There is no "correct" answer, good arguments can be made in favor of either client/project. **The two projects are both acceptable and are not different enough in terms of the financial criteria (NPV and IRR) to make a recommendation. For example, Wilson's IRR is higher than Tade's ( 24.3% versus 23.8%) but this should not form the basis for a recommendation to adopt Wilson. Similarly, the two projects' NPVs are not different enough to base the decision on. Therefore the decision must be based on business strategy considerations.

WILSON PROJECT	0	1	2	3	Tade Project	0	1	2	3
Sales		55,000	55,000	55,000			30000	40,000	110,000
Materials & Labor		(35,750)	(35,750)	(35,750)			(19,500)	(26,000)	(71,500)
Administrative Cost		(2,750)	(2,750)	(2,750)			(1500)	(2000)	(5500)
Depreciation & Amortization (1)		(23,672)	(2,672)	(2,656)			(23,672)	(2,672)	(2,656)
Taxable amounts		(7,172)	13,828	13,844			(14,672)	9,328	30,344
Tax (34%)		2,438	(4,702)	(4,707)			4,988	(3,172)	(10,317)
Net amount after tax		(4,734)	9,126	9,137			(9684)	6,156	20,027
Depreciation & Amortization		23,672	2,672	2,656			23,672	2,672	2,656
Net Cash Flow	(29,000)	18,938	11,798	11,793		(29,000)	13,988	8,828	22,683
Net Present Value	4,144					4,754
Internal Rate of Return	24.3%					23.8%