The internal rate of return (IRR) refers to the compound annual rate of return that a project generates based on its up-front cost and subsequent casi flows. Consider this case: Blue Lama Mining Company is evaluating a proposed capital budgeting project (project Deita) that will require an initial investment of $1,400,000. Blue Uama Mining Company has been basing capital budgeting decisions on a peoject's NpV; however, its new CFO wants to start using the TRR 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. Buve Uama Mining Company's Wacc is 7%, and project Delta has the same insk as the firm's average project. The project is expected to generate the following net cash fows: Which of the following is the correct calculation of project Delta's IRR? If this is an independent project, the IRQ method states that the firm should If the project's cost of capital were to increase, how would that affect the IRI The IRR would increase. The IRR would decrease. The irr would not change