A project manager is using the internal rate of return method to make the final decision on which project to undertake. If inflation is 3%, which of these four projects have the highest internal rate of return?

Select one:

1. $150,000 initial outlay with $50,000 per year cash inflows during the following five years.

2. $150,000 initial outlay with $25,000 per year ash inflows during the following five years.

3. $120,000 initial outlay with $60,000 per year cash inflows during the following five years.

4. $120,000 initial outlay with $80,000 per year cash inflows during the following five years