Question: Please answer any you can, show work or formulas used if possible so I can do it on my own. Thank you! Assignment 11- The
Assignment 11- The Basics of Capital Budgeting 1. Net present value (NPV) Evaluating cash flows with the NPV method The net present value (NPY) rule is considered one of the most common and preferred criteria that generally lead to good investment decisions. Consider this case: Suppose Pheasant Pharmaceuticals is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $3,000,000. The project is expected to generate the following net cash flows: Year Cash How Year 1 $375,000 Year 2 $475,000 Year 3 $400,000 Year 4 $450,000 Pheasant Pharmaceuticals's weighted average cost of capital is 8%, and project Beta has the same risk as the firm's average project. Based on the cash flows, what is project Beta's NPV? O -$1,836,833 O -$1,222,246 0 -$1,597,246 O -$1,197,246 Making the accept or reject decision Pheasant Pharmaceuticals's decision to accept If the firm follows the NPV method, it should or reject project Beta is independent of its decisions on other projects project Beta
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