Evaluating cash flows with the NPV method The net present value (NPV) rule is considered one of the most common and preferred criteria that generally lead to good investment decisions Consider thls case: Suppose Blue Hamster Manufacturing Inc. is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $2,750,000. The project is expected to generate the following net cash flows: Biue Hamster Manufacturing incis welghted werage cost of capital is 096 , and project Beta has the same risk as the firms averape project. Based on the cash flows, what is project Betas Nown - 3115.902 41,792.099 -41,007,902 51,357,402 Making the arcept or reject decision Hamster Manufacturing Incis weighted average cost of capital is 9\%, and project Beta has the same risk as the firm's average profect. Based a cash flows, what is project Beta's NPV? $882,902$1,392,098$1,007,902$1,357,902 Making the accept or reject decision Blue Hamster Manufacturing Incis decision to accept or reject project Beta is independent of its decisions on other projects. If the fitm follows the NPV method, it should Suppose your boss has anked you to analyze two mutually exclusive projects-project A and project B: Both projects require the same investment amount, and the sum of cash inflows of Project A Is larger than the sum of cash inflows of project B. A coworker told you that you don't need to do an NPV analysis of the projects bechuse You already know that project A will have a larger NPV than project B. Do you agree with your coworker's statement? No, the NoV calculation is based an percentage returns, so the size of a project's cash flows does not affect as project's NPV. Yes, project A will always thave the targest Nov, because its cash intliows are greathe than profect Bx cash inflows. No, the Nipv calculation wil take into account not only the projects' cash intliows but also the timing of cash inflows and outfliows