Suppose Happy Dog Soap Company is evaluating a proposed capital budgeting project (project Alpha) that will require an initial investment of $550,000. The project is expected to generate the following net cash flows: Year Cash Flow

Year 1 $375,000

Year 2 $425,000

Year 3 $500,000

Year 4 $450,000

Happy Dog Soap Companys weighted average cost of capital is 8%, and project Alpha has the same risk as the firms average project. Based on the cash flows, what is project Alphas net present value (NPV)?

$889,271

$339,271

$1,389,271

$1,067,125

Happy Dog Soap Companys decision to accept or reject project Alpha is independent of its decisions on other projects. If the firm follows the NPV method, it should (accept or Reject) project Alpha.