The internal rate of retum (LRK) refers to the compound annual rate of return that a project generates based on its up-front cost and subsequent cash Bows. Consider the case of Bloe Noose Home Bullders: Consider the following case: Wue Wbose Home Buliders is evaluating a proposed capital budgeting project (project sigma) that will require an initial investment of $750,000. Bhue Moose Home Bulders has been basing capital budgeting decisions on a project's NPV; Rowever, its new CFO wants to start using the tRR method for capital budgeting decisions. The CFO sars that the tRR is a better method because retums in percentage form are easier to understand and compare to required returns. Blue Moose Home Buliders's cost of capltal is 10%, and project Sigma 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 Sigma's IRR? 41.005 4,30500% 3,485.00% Which of the following is the correct calculation of project Sigma's IRR? 41.00% 4,305.00% 3,485.00% 3,690.00% 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 not change: The IRR would increase. The IRR would not decrease, Continue withnent