Evaluating cash flows with the NIV method The net present value (NPV) rufe is considered one of the most common and preferred criteria that generally leod to good investment decisions. Convider this case: Suppose Green Caterpillar Garden Supplies Inc, is evaluating a proposed capital bradgeting project (project Alpha) that will require an istial investment of $450,000. The project is expected to generate the following net cash flows: Green Caterpilar Garden Supplies Incis weighted average cost of capital is 9%, and project Alpha has the same risk as the firm's average project. Based on the cach flows, what a project Alpha's net present value (NPV)? 5541,599 5991,599 51,316,599 51,491,599 Green Gaterpalar Garden Supplies Incis weighted averape cost of capital is 9%, and project Alpha has the same risk as the firm's average project. Based on the cashy flows, what is project Alpha's net present value (NPV)? $541,5995991,599$1,316,599$1,491,599 Making the accept or reject decision Green Caterpillar Garden Supplies Incis decision to accept or reject project Alpha is independent of its decisions on other projects. If the firm follows the NPV method, it should project Alpha. Which of the following statements best explains what it means when a project has an NPV of 50 ? When a project has an NPV of $0, the project is earning a rate of return less thtin the project's weighted average cost of capital. It's OK to accept the project, as long as the project's profit is positive. When a project has an NPV of 50 , the project is earning a rate of return equal to the project's weighted average cost of capital. It's OK to accept a project with an NPV of $0, because the project is earning the required minimum rate of return. When a project has an NPV of $0, the project is earning a profit of $0. A firm should reject any project with an NPV of 50 , because the project is not profitable