Question
3.Assume you are the chief financial officer at Lehman Memorial Hospital. The CEO has asked you to analyze two proposed capital investment Project X and
3.Assume you are the chief financial officer at Lehman Memorial Hospital. The CEO has asked you to analyze two proposed capital investment Project X and project Y each project requires a net investment outlay of $10,000 and the opportunity cost of capital for each project is 14% the project's expected net cash flows are as following Year Project x Project Y 0 (10,000) (10,000) 1 6,500 3,000 2 3,000 3,000 3 3,000 3,000 4 1,000 3,000 a. Calculate each projects payback, NPV and IRR. b. Which project is financially acceptable? Explain your answer.
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