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

	Year-End Cash Flows ($ thousands)
Project	0	1	2	IRR
Playhouse (minor project)	26	16	18	19.5%
Fort (major poject)	75	38	50	10.8%

You can undertake only one project. If your cost of capital is 6%, use the incremental IRR rule to make the correct decision.