3. The Forbes OBGYN group purchased a new diagnostic machine for their office for $900,000. The expected cash flows for each year of the five year period is $120,000, $155,000, $186,000, $208,000, and $225,000 for the five years.

What is the internal rate of return or the IRR for the project?

4. Determine the Net Present Value for Problem 3 with an interest rate of 10%. Do you proceed or not with the project?

5. Determine the Payback Period for Problem 3.

IRR
	Year	Cash Flow	Cummulative Cash Flow
	Year 0	$ 900,000
	Year 1	$ 120,000
	Year 2	$ 155,000
	Year 3	$ 186,000
	Year 4	$ 208,000
	Year 5	$ 225,000
IRR=	%