Suppose Hungry Whale Electronics is evaluating a proposed capital budgeting project (project Alpha) that will require an initial investment of $400,000. The project is expected to generate the following net cash flows: Year Cash Flow Year 1 $375,000 Year 2 $500,000 Year 3 $450,000 Year 4 $450,000

Hungry Whale Electronicss 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)?

$663,880

$1,063,880

$1,438,880

$1,463,880

Hungry Whale Electronicss 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 ________________ project Alpha.