1.27 The Project IRR value shows the rate of return on the Total Project Cashflows for the PFI Option. Total Project Cashflows are defined as total income accruing to the PFI Partner (i.e. Third Party Income and the Unitary Charge) less costs incurred by it (i.e. Capital Expenditure, Operating Expenditure, Lifecycle Costs, Residual Costs and Transaction Costs). The PFI Partner uses Total Project Cashflows to service and repay all debt and to fund all dividend distributions. The Project IRR represents the implicit weighted average cost of capital for the project being assessed and will vary depending on which Target IRR is being tested.