Suppose Pheasant Pharmaceuticals is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $3,225,000. The project is expected to generate the following net cash flows:YearCash FlowYear 1 $375,000Year 2$425,000Year 3$500,000Year 4$400,000If Pheasant Pharmaceutical's weighted average cost of capital is 8%, what is the NPV for this project?Group of answer choices-$2,186,977-$5,047,481-$1,822,481-$1,422,481

Formulas: PVF is the present value factor PV is the present value.

Answered: Suppose Pheasant Pharmaceuticals is…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6PA: There are two projects under consideration by the Rainbow factory. Each of the projects will require...

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Suppose Pheasant Pharmaceuticals is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $3,225,000. The project is expected to generate the following net cash flows:

Year	Cash Flow
Year 1	$375,000
Year 2	$425,000
Year 3	$500,000
Year 4	$400,000

If Pheasant Pharmaceutical's weighted average cost of capital is 8%, what is the NPV for this project?

Group of answer choices

-$2,186,977

-$5,047,481

-$1,822,481

-$1,422,481

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