IRR

Hello John,

– A project has an initial outflow followed by years of inflows.
What would be the effect on NPV and IRR of an increase in the cost of capital?

1. The answer is NPV would decrease and IRR would have no change.
-With regards to the IRR, how come that there is no change?
With an increase in cost of capital it would cost us more therefore the “break even” cost of capital would increase as well.

– Please advise where I am getting things wrong?

Thanks