Question
Suppose Pheasant Pharmaceuticals is evaluating a proposed capital budgeting capital project that will require an initial investment of $3,225,000. The project is expected to generate
Suppose Pheasant Pharmaceuticals is evaluating a proposed capital budgeting capital project that will require an initial investment of $3,225,000. The project is expected to generate the following net cash flows:
| Year | Cash Flow |
| 1 | $375,000 |
| 2 | $425,000 |
| 3 | $500,000 |
| 4 | $400,000 |
Pheasant's weighted average cost of capital (WACC) is 8%. Based on the cash flows, what is this project's NPV?
A. -$2,186,977
B. -$1,422,481
C. -$1,822,481
D. -$5,047,481
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Finance For Nonprofit Board Members Linking Mission To Money
Authors: Allen J. Proctor
1st Edition
0970603940, 9780970603944
