Question
A pharmaceutical company is considering an R&D project with an initial investment of $1,200,000. The expected cash flows are: Year Cash Flow 1 $300,000 2
A pharmaceutical company is considering an R&D project with an initial investment of $1,200,000. The expected cash flows are:
Year | Cash Flow |
1 | $300,000 |
2 | $350,000 |
3 | $400,000 |
4 | $450,000 |
5 | $500,000 |
Requirements:
- Calculate the payback period.
- Calculate the NPV using a 9% discount rate.
- Calculate the IRR.
- Calculate the profitability index.
- Assess the project's feasibility.
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Managerial Accounting
Authors: John Wild, Ken Shaw
5th edition
978-1259176494, 1259176495, 978-1259347641, 1259347648, 978-0078025600
