Capital Budgeting: Net Present Value Versus The Internal Rate of Return Methods (First, define the concept of an independent capital budgeting project for a firm as opposed to a mutually exclusive project. Next, define the concept of the net present value (NPV) as a capital budgeting method and also explain how an decrease in the cost of capital (the WACC) will impact (increase or decrease) the NPV of a project. Finally, define the concept of the internal rate of return (IRR) method as a capital budgeting method and also explain how an increase in the cost of capital will impact (increase or decrease) the IRR of a project ).