Suppose Pheasant Pharmaceuticals is evaluating a proposed capital budgeting project project Alpha) that will require en initial investment of $400,000. The project is expected to generate the following net ashows Year Year 1 Year 2 Cash How $375,000 $450,000 $500,000 5450,000 Year 3 Year 4 Pheasant Pharmaceuticals's weighted average cost of capital is 10%, and project Alpha has the same risk as the firm's average project. Based on the cash flows, what is project Alpha's net present value (NPV) $995,823 O $1,145, 196 0 $1,445,823 $1,370,823 Making the accept or reject decision Pheasant Pharmaceuticals's decision to accept or reject project Alpha is independent of its decisions on other projects. If the fire follows the NPV method, It should project Alpha Which of the following statements best explains what it means when a project has an NPV { $0? When a project has an NPV of $0, the project is earning a profit of 50. Afirm should reject any project with an NPV of $0, because the project is not profitable. when a project has an NPV of so, the project is carning a rate of return equal to the project's weighted average cost of capital. It's OK to accept a project with an NPV of $0, because the project is earning the required minimum rate of return, when a project has an NPV of so, the project is earning a rate of return less than the project's weighted average cost of capital. It's OK to accept the project, as long as the project's profit is positive MacBook AS DOO 80 F2 GODFA FS 2 & # 3 $ 4 % 5 2 6