Consider the following case: Blue Moose Home Builders is evaluating a proposed capital budgeting project (project Delta) that will require an initial investment of $1,500,000. Blue Moose Home Builders has been basng capital budgeting decisions on a project's NP, however, its new oo wants to start using the IRR method for capital budgeting deasons. The 0 says that the RR is a better method and returns are easier to understand and to compare to required returns. Blue Moose Home Builders's WACC is 7%, and project Delta has the same risk as the firm's average project. The projedt is expected to generate the following net cash flows: Which of the following is the correct calculation of projedt Delta's IRR? Year Cash Flo Year 1 $325,000 Year 2 $450,000 Year 3 $400,000 Year 4 $475,000 0 3.37% o 4.11% 0 3.74% 0 2.99% 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 IRA? O The IRR would not change. O The IRR would increase O The IRR would decrease. O Type here to search