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Suppose Cute Camel Woodaraft Compary is evaluating a proposed capital budgeting project (project iseta) that will require an inalial anestanere of 89,750,000, The project is

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Suppose Cute Camel Woodaraft Compary is evaluating a proposed capital budgeting project (project iseta) that will require an inalial anestanere of 89,750,000, The project is expected to generate the following net cash flownt Cute Camel Woodcraft Cempany's weighted average cost of capital is bhe, and project Beta has the same risk as the firm's average project. Eased on the cash nows, what is project Beta's WPyn (Noter Do not round your intermed ate calculations.) 41,577,778 $1.376,019 54,121,981 51.371.981 Making the accept or reject decision $1,378,019 54,121,981 $1,371,981 Making the accept or reject decision Cute Camel Woodcraft Company'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. Sappose your boss has asked you to andilyze two mutually exclusive projects-project A and project B. Eoth projects require the same investment. amount, and the sum of cash inflows of Project A is larger than the sum of cash inflows of project B. A coworker told you that you don't need to do an NPV analysis of the projects because you already know that project A will have a larger NPV than project B. Do you agree with your coworker's statement? No, the NPY caiculation will take into account not oniy the projects" cash inflows but also the biming of cash inflows and outflows. Consequently, project B could have a larger NPV than project A, even though project A has iarger cash inflows. No, the NPV calculation is based on percentage returns, so the size of a project's cash flows does not affect a project's NPV. Yes, project A will always have the fargest NPW, because its cash inflows are greater than project B's cash infliows

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