A firm is considering how to finance a 5000000 project that will generate $1.5M of incremental after-tax cash flows. Assume the IRR of the project is 12%. If the firm finances the project with only equity, the NPV will be negative. However, if the project is financed with 50% debt the NPV will be positive. This increase to the NPV of the project has what effect on the project's IRR?

Increases the IRR

Decreases the IRR

No effect

not enough information to answer