Falcon Freight is evaluating a proposed capital budgeting project (project Delta) that will require an initial investment of $1,500,000. Falcon Freight 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. Falcon Freight's WACC is 8%, 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 1 Cash Flow $300,000 Year 2 $425,000 Year 3 Year 4 $475,000 $450,000 Which of the following is the correct calculation of project Delta's IRR? 2.95% O 3.69% 0 4.24% O 3.32% 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? O The IRR would decrease. O The IRR would not change. O The IRR would increase