Calculate the NPV for a project with the following cash flows. The discount rate (weighted average cost of capital) is 7% and the initial investment is $50,000.

Cash flow each year:

Year 1: $10,000 Year 2: $12,000 Year 3: $15,000

Year 4: $15,000

Year 5: $15,000

Answer: ___________________________ (10 pts)

Which of the following are potential problems in capital budgeting?

		Consistency
		Conflicts of interest
		Forecasting bias by the sponsoring manager
		All of the above