valuating 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 this case:

Suppose Lumbering Ox Truckmakers is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $3,000,000. The project is expected to generate the following net cash flows:

Year Cash Flow

Year 1 $325,000

Year 2 $475,000

Year 3 $475,000

Year 4 $500,000

Lumbering Ox Truckmakerss weighted average cost of capital is 8%, and project Beta has the same risk as the firms average project. Based on the cash flows, what is project Betas NPV?

-$1,547,253

-$1,222,253

-$1,779,341

-$1,072,253