Question
Suppose Pheasant Pharmaceuticals is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $2,225,000. The project is expected to
Suppose Pheasant Pharmaceuticals is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $2,225,000. The project is expected to generate the following net cash flows:
| Year | Cash Flow |
|---|---|
| Year 1 | $350,000 |
| Year 2 | $450,000 |
| Year 3 | $400,000 |
| Year 4 | $450,000 |
Pheasant Pharmaceuticalss weighted average cost of capital is 7%, and project Beta has the same risk as the firms average project. Based on the cash flows, what is project Betas NPV?
-$835,028
$1,389,972
-$435,028
-$385,028
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Energy And Finance Sustainability In The Energy Industry
Authors: André Dorsman, Özgür Arslan-Ayaydin, Mehmet Baha Karan
1st Edition
3319322664, 978-3319322667
