Modern Federal Bank is setting up a brand new branch. The cost of the project will be $1.2 million. The branch will create additional cash flows of $250,000, $412,500, and $650,000 over the next three years. The firm's cost of capital is 6 percent. What is the internal rate of return on this branch expansion? Round your answer to the nearest percent.

5%

4%

none of these

3%

6%