You work for an outdoor play structure manufacturing company and are trying to decide between two projects:

Year-End Cash Flows ($ thousands)

Project 0 1 2 IRR Playhouse -26 15 20 21.2%

Fort -77 39 51 10.6%

You can undertake only one project. If your cost of capital is 5%, use the incremental IRR rule to make the correct decision.

AppendixLO1