I'm struggling on this problem and need help solving it!

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 cash flows.

Blue Lima mining company is evaluating a proposed capital budgeting project (project Sigma) that will require an initial investment of $850,000

Blue Lima mining company has been basing capital budgeting decisions on a projects NVP; 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 from are easier to understand and compare to required returns. Blue Lima mining Company's WACC is 9%, and project Sigma has the same risk as the firms average project.

The project is expected to generate the following net cash flows:

Year Cash Flow

Year 1 $375,000

Year 2 $500,000

Year 3 $450,000

Year 4 $475,000

Which of the following is the correct calculation of project Sigma's IRR?

A.) 29.60%

B.) 31.45%

C.) 33.30%

D.) 37.00%

If this is an independent project, the IRR method states that the firm should __________ (accept / reject) project Sigma.

If the project's cost of capital were to increase, how would that affect the IRR?

A.) The IRR would increase

B.) The IRR would not change

C.) The IRR would decrease