Below is your estimated cash flows from the proposed acquisition of a new milling machine, At t=0, Net cash flow $967,500 =- Operating cash flows: OCF1 = $365,000 = OCF2 = $437,000 OCF3 = $392,200 OCF4 = $365,320 OCF5 = $365,320 At the end of the project (t= 5), Net cash flow = $57,600 If your cost of capital is 9%, Should the machine be purchased based on cash flows you estimate above? A. No. Because NPV is $599,220.72 B. No. Because IRR is 30.82% C C. Yes. Because IRR is 5.82% D. Yes. Because NPV is $599,220.72 An NPV profile plots a project's NPV at various costs of capital, labeled "A" and "B" in the graph. A project's NPV profile is shown as follows. Identify the range of costs (ranges labeled "A" and "B") of capital that a firm would use to accept and reject this project. NPV Dollars 400 300 200 A 100 o -100 -200 0 2 4 6 8 10 12 14 16 18 20 COST OF CAPITAL I Percent A. A: Reject, B: Accept B. A: Accept, B: Reject C. A:Accept, B: Accept D.A: Reject, B: Reject