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Capital Budgeting Question
I’m doing work for a biotech firm, which is new to me, and I need to do a presentation where I represent the profitibality, cash flows, and timing of several indications (pharma for the treatment of a disease). I was thinking of using profitability index and discounted payback period, but, this is a bit different from theoretical problems. Instead of having a CF0 massive outflow, I have monthly revenues and expenses, revenues outweighing expenses of course.
I was thinking of approaching this by choosing a set time period (5 years), and discounting back all of the outflows as CF0, then applying that to the profitability index and payback period formulas. Does anyon have any comments, advice, or similar experiences they can share to shed light on whether my solution is good?
Thanks. |
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