The net present value (NPW) rule is considered one of the most common and preferred criteria thot generally lead to good investiment decisions. Consider this case: Suppose Pheasant phacmaceuticale is evaluating a proposed capital budgeting project (project Alpha) that will require an initial investment of 5550,000 . The project is expected to generate the followind net cash flows: Pheasant Pharmaceuticals's weighted average cost of capital is 8%, and project Alpha has the same risk as the frm's average project. Based on the cash flows, what is project Alpha's net present value (NPV)? 51,230,812 $1,026,974 $305,815 $855,812 Making the accept or reject decision Pheasant Pharmaceuticals's decision to accent or reject project Apha is independent of its decisions on other projects. If the firm follows the NPV method, it should project Alpha. Which of the following statements best explains what it means when a project has an NPV of $0 ? When a project has an NPY of 50 , the project is earning a rate of return equal to the project's weighted average cost of capital. It's OK to accebt a profect with an NPV of $0, because the profect is earning the required minimam rate of return. When a peglect fus an NPV of $0, the project is earning a profit of $0. A fim should reject any project with an Nir of $0, because the . project is not profitable. When a project has an NDY of 50 , the project is earning a rate of roturn less than the project's welghted average cost of capital. It's oK to accept the project, as long as the project's profit is positive