5. Assume you are the chief financial officer at MMM Hospital. The CEO has asked you to analyze two proposed capital investments: The S Project vs. the T Project Each project requires a net investment outlay of $75,000, and the cost of capital for each project is 10%. The projects expected net cash flows are as follows: Year Project S Project T 0 -$75,000 -$75,000 1 $20,000 $50,000 2 $20,000 $15,000 3 $20,000 $15,000 4 $30,000 $10,000

Calculate each projects net present value (NPV) and internal rate of return (IRR).

Which project (or projects) is financially acceptable? If you reach different conclusions regarding the financial acceptability of each project, explain why, given both projects return total cash flows of $90,000 over the four years.