ASSINGMENT 1: Investment Management delivered date 27/11/2020 Total points : 10 submission date : 10/12/2020 Due to the current circumstances and due to the outbreak of the virus - Covid 19-, A COMPANY called Pfizer was able to develop a vaccine against this epidemic. But the company's planning team decided that there would be a test period for this drug that would extend for one year. The team expects that the success rate of this vaccine in the market will reach 65%, at a cost of up to $ 900000, in the first phase. If the vaccine succeeds, the company will start mass-producing to the market at a cost of up to $ 1,400,000, extending up to 5 years. Use a discount rate of 13%. A. Find the followings: 1. NPV for this project from year 1 till year 5 2. Expected payoff for this project 3. NPV at time 0 based on the expected payoff considering the cost in test phase. 4. Should they test? Investment Year 1 Years 2-6 $12,000000 Revenues Variable Costs (3000000) Fixed Costs (1,500000) (500000) Depreciation Pretax profit Tax (25%) Net Profit Cash Flow $1400000 ASSINGMENT 1: Investment Management delivered date 27/11/2020 Total points : 10 submission date : 10/12/2020 Due to the current circumstances and due to the outbreak of the virus - Covid 19-, A COMPANY called Pfizer was able to develop a vaccine against this epidemic. But the company's planning team decided that there would be a test period for this drug that would extend for one year. The team expects that the success rate of this vaccine in the market will reach 65%, at a cost of up to $ 900000, in the first phase. If the vaccine succeeds, the company will start mass-producing to the market at a cost of up to $ 1,400,000, extending up to 5 years. Use a discount rate of 13%. A. Find the followings: 1. NPV for this project from year 1 till year 5 2. Expected payoff for this project 3. NPV at time 0 based on the expected payoff considering the cost in test phase. 4. Should they test? Investment Year 1 Years 2-6 $12,000000 Revenues Variable Costs (3000000) Fixed Costs (1,500000) (500000) Depreciation Pretax profit Tax (25%) Net Profit Cash Flow $1400000