Ch 11: Assignment - The Basics of Capital Budgeting 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 Pheasant Pharmaceuticals is evaluating a proposed capital budgeting project (project Alpha) that will require an initial investment of $400,000. The project is expected to generate the following net cash flows: Year Cash Flow Year 1 $325,000 Year 2 $400,000 Year 3 $400,000 Year 4 $500,000 Pheasant Pharmaceuticals's weighted average cost of capital is 9%, and project Alpha has the same risk as the firm's average project. Based on the cash flows, what is project Alpha's net present value (NPV)? $1,222,923 $1,397,923 $897,923 $497,923 MacBook