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Suppose tumbering Ox Truckmakers is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $2,500,000. The project is expected

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Suppose tumbering Ox Truckmakers is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $2,500,000. The project is expected to generate the following net cash flows: Lumbering Ox Iruckmakers's weighted average cost of capital is 10%, and project Beta has the same risk as the firm's average project, Based on the cash flows, what is project Beta's NPV? 51,369,886$1,312,808$741,57251,141,572 Making the accept or reject decision 51,369,88651,312,808$741,572$1,141,572 Making the accept or reject decision Lumbering Ox Truckmakers'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. Suppose your boss has asked you to analyze two mutually exclustve projects-project A and project B. Both 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 NPV calculation will take into account not only the projects' cash inflows but also the timang of cash inflows and outfiows: Consequently, project B could have a Larger NiF than project A, even though project A has larger cash inflows. Yes, project A will always have the Largest NPV, because its cash intlows are greater than project B's cash intlows. No, the NPV calculation is based on percentige returns, so the size of a project's cash flows does not affect a project's NFV

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