You work for a company, which expects to earn at least $7$ percent on its projects. The cash flow

information for $4$ potential projects is described below. Which of the projects would you fund if

the decision is based only on financial information? What other information would you need to

make such a decision? Why? Would an organization ever take on a project with negative NPV$?$

If so why?

Project ALPHA: This project requires an initial investment of $$1,000,000$ at the project

initiation, plus an estimated $$75,000$ in each of the following $5$ years. Project revenues will

begin in year $4,$ estimated at $$250,000$ in year $4,$$$350,000$ in year $5$ and $$450,000$ in years $6$

through $8.$

Project BETA: Project Beta requires investment of $$500,000$ at initiation, and then an

estimated $$350,000,$$$250,000,$ and $$150,000$ in the following $3$ years, respectively. Annual

revenues of $$225,000$ will begin to flow in starting in year $5-$ for $10$ years in total.

Project GAMMA: This project will require an initial investment of $$250,000$ at the project

initiation, plus an estimated $$450,000,$$$565,000$ and $$325,000$ in each of the following

years, respectively. The payout for this project will be a lump sum of $$1,873,000$ in year $4.$

Project DELTA: Project Delta is a $15$ year project that requires an initial investment of

$$350,000.$ Annual costs in each of the following years of $$75,000$ will be offset by annual

revenues of $$114,000$ in each of those years.