Grey Fox Aviation Company is evaluating a proposed capital budgeting project (project Delta) that will require an initial investment of $1,600,000. Grey Fox Aviation 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. Grey Fox Aviation 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: Which of the following is the correct calculation of project Delta's IRR? Year Year 1 Year 2 Year 3 Year 4 Cash Flow $375,000 $500,000 $450,000 $475,000 O O 0 O 4.98% 4.74% 4.27% 5.21% 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 increase. The IRR would decrease. The IRR would not change