Home irses alog and Study Tools ntal Options llege Success Tips areer Success Tips IENDED FOR YOU Study Tools Tools for Introductory rate Finance Help Give Feedback Ch 11: Assignment - The Basics of Capital Budgeting Evaluating 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 $2,225,000. The project is expected to generate the following net cash flows: Year Year 1 Year 2 Year 3 Year 4 Cash Flow $375,000 $500,000 $475,000 $425,000 Lumbering Ox Truckmakers's weighted average cost of capital is 10%, and project Beta has the same risk as the firm's average project. Based on the cash flows, what is project Beta's NPV? O-$448,713 O-$823,713 O-$3,048,713 -$947,270 Making the accept or reject decision K