6. Day Surgery is considering an investment in one of three mutually exclusive projects: A, B, and C. The firms cost of capital is 15% and the risk free (RF) is 10%?

A B C

Initial Investment $15,000. $11,000 $19,000

Year (t) Cash Inflows (CF)

1 $6,000 $6,000 $4,000

2 $6,000 $4,000 $6,000

3 $6,000 $5,000. $8,000

4 $6,000 $2,000 $12,000

Risk Index 1.80 1.00 .60

What is the payback period for each project?

Find the net present value (NPV) of each project using the firms cost of capital?

What is the Internal Rate of Return (IRR) for each project?