Year Cash Flow Year 2 Years Year 4 $325,000 500,000 475,000 400,000 Hungry Whale Blectronics's weighted average cost of capitals, and project Beta has the same risk as the firm's average project. Based on the cash flow, what is project Beta's NPV? (Note: Do not round your intermediate calculations -51,599,322 51.839,220 -54,599,322 -51,199,322 Making the accept or reject decision Hungry Whale Electronics's decision to accept or reject project beta 's independent at its decisions on other projects. If the firm follows the NPV method, It should project Beta Suppose your boss tas bikes you to analyze two mutually exclusive projects-project A and project B. Both projects require the same Investment amount, and the sum of cash Infows or 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 8. Do you agree with your coworker's statement Yes, project A wel always have the largest HPV, because its cash inflows are greater than project By cash inflows. No, the NPV calculation witake into account not only the projects' cash innows but also the timing of cash inflows and outflows Consequently, project could have a larger NPV than project A, even though project A has larger cash inflows No, the NPV calculation is based on percentage returns, so the size of a project's cash flows does not affect a project's NPV. The capital budgeting process is comprehensive and is based on certain assumptions, models, and benchmarks. This process often begins with a project analysis. Generally, the first step in a capital budgeting project analysis - which occurs before any evaluation method is applied-Involves estimating the project's expected cash flows Evaluating cash flows with the NPV method The net present value (NPV) rule is considered one of the most common and preferred criteria that generally lead to good investment decisions. Consider this case: Suppose Hungry Whale Electronics is evaluating a proposed capital budgeting project (project Beta) that will require an initial Investment of $3,000,000 The project is expected to generate the following net cash flows: Year Cash Flow Year 1 $325,000 Year 2 Year 3 500,000 475,000 400,000 Year 4