Purple Whale Foodstuffs Inc, is evaluating a proposed capital budgeting project (project Sigma) that will require an initial investment of $850,000. Purple Whale Foodstuffs inc. 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 returns in percentage form are easier to understand and compare to required returns. Purple Whale Foodstuffs inci' WACC is 8%, and project Sigma has the same risk as the firm's average project. he project is expected to generate the following net cash flows: Which of the following is the correct calculation of project Sigma's IRR? 22.2246 21.48% 26.85% 25.519 If this is an independent orviect, the IRR methed states that the firm should If the brefects cost of capital were to increase, hew mould that affect the 1 ih