Blue Llama Mining Company is evaluating a proposed capital budgeting project (project Delta) that will require an initial investment of $1,600,000. Blue Lama Mining Company has been basing capital budgeting decisions on a project's NPV; however, its new CFO wants to start using the IRR method for capital budgeting decisions. The CFO says that the IRR is a better method because percentages and returns are easier to understand and to compare to required returns. Blue Lama Mining Company's WACC is 9%, and project Delta has the same risk as the firm's average project. The project is expected to generate the following net cash flows: Year Year: Year 2 Year Cash Flow $375,000 5500,000 $425,000 5500,000 Year 4 Which of the following is the context Calculation of project Delta's IRR? 44 CENGAGE MINDTAP Search this Ch 11- Assignment - The Basics of Capital Budgeting Which of the following is the correct calculation of project Delta's IRR? 4.48% 0 4.72% 5.439 4.25 If this is an independent project, the IRR method states that the firm should If the project's cost of capital were to increase, how would that affect the accept project Delta The would increase reject project Delta The would not change The would decrease Grade