Drop down: Accept or Reject

3. Internal rate of return (IRR) flows. Consider the case of Blue Moose Home Builders: Consider the following case: Blue Moose Home Builders is evaluating a proposed capital budgeting project (project Sigma) that will require an initial investment of $800,000. Blue Moose Home Builders has been basing capital budgeting decisions on a project's NPV; however, its new CFO wants to start using the IRR method compare to required returns. Blue Moose Home Builders's cost of capital is 8%, and project Sigma has the same risk as the firme The project is expected to generate the following net cash flows: Which of the following is the correct calculation of project Sigma's IRR? 38.20%3,247.00%4,011.00%3,438.00% 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 IRR? The IRR would increase. The IRR would not change. The IRR would not decrease