EBK FUNDAMENTALS OF CORPORATE FINANCE
EBK FUNDAMENTALS OF CORPORATE FINANCE
4th Edition
ISBN: 8220103631754
Author: Harford
Publisher: PEARSON
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Chapter 8, Problem 38P

Orchid Biotech Company is evaluating several development projects for experimental drugs. Although the cash flows are difficult to forecast, the company has come up with the following estimates of the initial capital requirements and NPVs for the projects. Given a wide variety of staffing needs, the company has also estimated the number of research scientists required for each development project (all cost values are given in millions of dollars).

Chapter 8, Problem 38P, Orchid Biotech Company is evaluating several development projects for experimental drugs. Although

a. Suppose that Orchid has a total capital budget of $60 million. I-low should it pri-
oritize these projects?
b. Suppose that Orchid currently has 12 research scientists and does not anticipate being able to hire more in the near future. How should Orchid prioritize these projects?

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