Question: can someone help me with this problem? The internal rate of retum (IRR) refers to the compound annual rate of return that a project generates

The internal rate of retum (IRR) refers to the compound annual rate of return that a project generates based on its up-front cost and subsequent cash flows. Consider the case of Blue Uama Mining Company: Blue Uama Mining Company is evaluating a proposed capital budgeting project (oroject Sigma) that will require an initial investment of $850,000. Blue Ulama Mining Company has been basing capital budgeting decisions on a project's Noy; however, its new CFO wants to start using the IRR. method for capital budgeting decisions. The CFO says that the 1RR is a better method because retums in percentage form are Easier to understand and compare to required returns. Blue Uama Mining Company's Wacc is 90 , and project Sioma has the same risk as the fitm's average prolect. The project is expected to generate then following net cash fiows: Which of the following is the correct calculation of project Sigma's IRR? 44.40% 37.00%29.60% 31.45% 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 decrease
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