Evaluating cash flows with the NP method The net rent va IV) considered one most common and preferred otheria that generally lead to good leverer dedit Consider this case Suppose tenant Pharmaceuticals is evaluating procedopal budgeting project project but that will require an instalaterte 12.325,000. The project is expected to generate the following net cash flows Year Year 1 Year 2 Cash Flow $350,000 500,000 400.000 400.000 Year 3 Pheasant Pharmaceuticals's wat verage cost of capital and project byta has the same voks were colect. Sed on the cash flows what is projecte V? (Note: Do not and your intermediate calculator) -$490,616 -3,115,616 O $100.816 $890,816 Making the accept or reject decision Pheasant Pharmaceuticals's decision to accept or reject project Beta is independent of its decisions on other projects. If the firm follows the NPV method, it should project Beta. Which of the following statements best explains what it means when a project has an NPV of so? O when a project has an NPV of so, the project is earring a rate of return less than the project's weighted average cost of capital, is OK ta accept the project, as long as the project's profit is positive. When a project has an NPV of so, the project is earning a rate of return equal to the project's weighted average cost of capital. It's ok to accept a project with an NPV of so, because the project is caring the required minimum rate of return. When a project has an NPV of so, the project is earning a protit of $0. A firm should reject any project with an NPV of $0, because the project is not profitable