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We did the hardwood in our powder room and love it. The flow is much better than breaking up the flooring with some type of tile. Hardwood is also easy to keep clean and a powder room doesn't usually have a lot of water usage.
We have wood in ours and if it is only a powder room, then I would go with wood. I think it looks nice. Plus you don't have to worry about a tub or shower in which case I would not do wood due to the moisture.
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