Assume a project has a CF0 of \($200\),000. The investment is expected to generate \($5\),000 dollars annually for the next ten years followed by a return of the principal investment, \($200\),000. If the cost basis is reduced by 25%, what is the relationship to the cash flows? What is the effect on project yield?

a There is no effect on the IRR or the cash flow.

b Cash flow stays the same while IRR increases.

c IRR increases and cash flow increases.

d Cash flow and yield decrease while IRR increases.