An analyst does research about net present value and gathers the following information about three capital budgeting projects (in $ thousands):
| Project | Initial Outlay | Cash Flow Year 1 | Cash Flow Year 2 | Cash Flow Year 3 |
| 1 | 150000 | 70000 | 90000 | 40000 |
| 2 | 125000 | -50000 | 90000 | 195000 |
| 3 | 200000 | 90000 | -30000 | 250000 |
Which projects has the highest internal rate of return（）
A. Project 1.
B. Project 2.
C. Project 3.
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