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5. Berdwen, Inc. is analyzing the merits of a potential project. There is great volatility in the marketplace which will impact the project with risky

5. Berdwen, Inc. is analyzing the merits of a potential project. There is great volatility in the marketplace which will impact the project with risky free cash flows. Berdwen, Inc. has a weighted average cost of capital of 15.2%, and forecasts the free cash flows below:

Year

Expected FCF

0

-$10,000

1

$16,150

2

-$5,500

Use two appropriate capital budgeting techniques to determine if this project should be accepted.

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