Evaluating cash flowis 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 OK Truckmakers is evaluating a proposed capital budgeting project (project Alpha) that will require an initial investment of $600,000. The project is expected to generate the following net cash flows: Lumbering Dx Truckmakersis weighted average cost of capital is 105i, and project Alpha has thesame riak as the firmis average project. Based on the caah flowis, what is project Noha's net present value (KPV)? 5530,444 Lumbering 0 x Truckmakers's weighted average cost of capital is 10%, and project Alpha has the sarne risk as the firm's average project. Based on the cash flows, what 15 project Alpha's net present value (NPV)? $550,444$50,444$1,050,444$1,250,444 Making the accept or reject decistion Lumbering Ox Truckmakers's decision to accept of reject voroject Apha is independent of its decisions on other projects. If the firm follows the ippy mathod, it should project Alpha. Which of the follo ments beit explaine what it means when a profect tas an kuy of 30? When a accept the project, as lone as the project's proft is positive. brojed is nut profitable. When a orslect tas an NPV of 50 , the profect is earning a rate of ceturn cocal to the projects weighted average cost of capital. It's ok to accept a project with an NPV of 50 , because the project is earning the magired minimum rete of teturn