9.3 Consider the following net cash flows:

Year Cash Flow

0 $2000

2 $2,000

3 1,500

4 2,500

5 4,000

a.What is the net present value of the stream if the opportunity cost of capital is 10 percent?

Insert your response here.

B. What is the value of the stream at the end of year 5 if the cash flow are invested in an account that pays 20 percent annually?

Insert your response here.

C. What cash flow today (year 0), in lieu of the $2,000 cash flow, would be needed to accumulate $20,000 at the end of year 5? (Assume that the cash flows for year 1 through 5 remain the same.)

Insert your response here.

9.6 Assume that you are the chief financial officer at Porter Memorial Hospital. The CEO has asked you to analyze two proposed capital investments 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 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

a. Calculate each projects payback, NPV and IRR

Insert your response here.

b. Which project (or projects) is financially acceptable? Explain your answer.

Insert your response here.