Compute the total materials variance and the price

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1. Biogen, Inc. has a cost of capital of 9%, and it has a project with the following cash flows. What is the NPV of this project?

Year Net Cash Flow
0 -100,000
1 -20,000
2 20,000
3 100,000
4 150,000
5 175,000


2. Your organization has been asked to invest in a continuing care retirement center. Your investment will be $600,000 per year for the next five years. After five years, cash flows will be $400,000 per year for the next 15 years. If your discount rate is 10 percent:

a) What is the present value of the investment?

b) What is the present value of the cash flows?

c) What is the profitability index?

Reference no: EM13523642

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