Suppose Green Caterpillar Garden Supplies inc. 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 flow Year Yeart Year 2 Year 3 Cash Flow 5275,000 $500,000 $475,000 Year $500,000 Green Caterpillar Garden Supples Inc.'s weighted average cost of capitalism and project deta has the same risk as the firm's average project. Based on the cash flows, what is project Beta's NPV? -5797,116 -53,022.116 -5322,116 5956,539 Making the accept or reject decision Making the accept or reject decision Green Caterpillar Garden Supplies Inc.'s decision to accept or roject project teta is independent of its decisions on other projects. If the fire sous the NPV method, it should project Beta Suppose your boss has asked you to analyze two mutually exclusive projects-project A and project B. Both projects require the same investment amount, and the sum of cash inflows of Project Als larger than the sum of cath inflows of projects. A coworker told you that you don't need to do an NPV analysis of the projects because you already know that project will have a larger NPV than project 1. Do you agree with your coworker's statement No, the NPV calculation is based on percentage returns, so the size of a project's cath flows does not affect a project's NV No, the NPV calculation will take into account not only the projects cash inflows but also the timing of cath inflows and outflows. Consequently, project 8 could have a larger NPV than project A, even though project A has larger cash intowe. Yes, project A will always have the largest Nov, because its cash indows are greater than projectes cathindows Grade It Now Save & Continue Continue without saving Falcon Freight is evaluating a proposed capital Budgeting project project Delta) that will require an initial investment of 51.600.000 Falcon Freight has been basing capital budgeting decisions on a project NPV however, its new Cho wants to start using the method for capital budgeting decision, The Cro says that the IRR is better method because percentages and returns are easier to understand and to compare to required returns Falcon Freights WACC , and project Delte has the same as the firm's average project The project is expected to generate the following net cash flows: Year Year: Cash Flow 5.375,000 5500,000 $450,000 Year Year Year 4 $475,000 Which of the following is the correct calculation of project Delta' TAR? 5.69 4.27 4.74 4.98 If this is an independent project, the IRR method states that the firm should Which of the following is the correct calculation of projecte 4.27 4.74 4.90 if this is an independent project, the the method states that the firm should if the project's cost of capital were to increase, how would that affect the The IRR would decrease The IRR would increase The IRR would not change Grade It Now Save & Continue
