Based on the following scenario, which project do you support if you make a decision based on the IRR alone?

Project A requires an initial investment (or you may say, cash outflow) of $525,000 and is expected to generate the following net cash inflows:

Year 1: $120,000

Year 2: $110,000

Year 3: $120,000

Year 4: $110,000

Year 5: $120,000

Year 6 : $130,000

The expected rate of return is 5%.

Project B also requires an initial investment (or you may say, cash outflow) of $525,000 and is expected to generate the following net cash inflows:

Year 1: $300,000

Year 2: $200,000

Year 3: $90,000

Year 4: $0

Year 5: $0

Year 6 : $0

The expected rate of return is 5%.

A) Project A

B) Project B