Question
9. Suppose that you as the chief financial officer for Kindle Memorial Hospital and you were asked by the CEO to analyze two proposed capital
9. Suppose that you as the chief financial officer for Kindle Memorial Hospital and you were asked by the CEO to analyze two proposed capital investments Project X and Project Y. Each project requires a net investment outlay of $10,000, and the cost of capital for each project is 12 percent. The projects expected net cash flows are as follows: 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 9. a. Calculate each projects payback period, net present value (NPV) and Internal rate of return (IRR) b. Which project (or projects) is financially acceptable? Explain your answer briefly.
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