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Business, 20.06.2020 18:57 bestsisever0

Suppose Black Sheep Broadcasting Company is evaluating a proposed capital budgeting project (project Alpha) that will require an initial investment of $600,000. The project is expected to generate the following net cash flows: Year Cash Flow
Year1 $375,000
Year 2 $475,000
Year 3 $400,000
Year 4 $450,000
Black Sheep Broadcasting Company's weighted average cost of capital is 8%, 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)?
A. $202,754
B. $1,252,754
C. $1,202,754
D. $802,754 Making the accept or reject decision Black Sheep Broadcasting Company's decision to accept or reject project Alpha is independent of its decisions on other projects. If the firm follows the NPV method, it should project Alpha.

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