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Suppose Cold Goose Metal Works Inc. is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $3,225,000. The project

Suppose Cold Goose Metal Works Inc. is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $3,225,000. The project is expected to generate the following net cash flows:

Year

Cash Flow

Year 1 $275,000
Year 2 $450,000
Year 3 $500,000
Year 4 $425,000

Cold Goose Metal Works Inc.s weighted average cost of capital is 10%, and project Beta has the same risk as the firms average project. Based on the cash flows, what is project Betas NPV?

A: -$2,324,593

B: -$1,937,161

C: $1,287,839

D: -$1,662,161

Cold Goose Metal Works Inc.s decision to accept or reject project Beta is independent of its decisions on other projects. If the firm follows the NPV method, it should ________ project Beta

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