Question: Calcite Ltd used the NPV and IRR methods of investment appraisal to evaluate a project that has an initial cash outlay followed by annual net

Calcite Ltd used the NPV and IRR methods of investment appraisal to evaluate a project that has an initial cash outlay followed by annual net cash inflows over its life. After the evaluation had been undertaken, it was discovered that the cost of capital had been incorrectly calculated and that the correct cost of capital figure was in fact higher than that used.

What will be the effect on the NPV and IRR figures of correcting for this error?

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