Question
A Hospital has estimated its cash flows, listed as follows: Years Expected Net Cash Flow 0 ($1,000,000) 1 $150,000 2 $255,000 3 $267,000 4 $350,000
A Hospital has estimated its cash flows, listed as follows:
| Years | Expected Net Cash Flow |
| 0 | ($1,000,000) |
| 1 | $150,000 |
| 2 | $255,000 |
| 3 | $267,000 |
| 4 | $350,000 |
| 5 | $305,000 |
The year 0 cash flow is the investment cost. The later years are their cash flow from the operation. The Hospitals corporate cost of capital is 12% A. What is the projects payback (time)? Please use cumulative cash flow (list your table) to find it B. Assuming the project has average risk, What is its NPV? C. What is the projects IRR? D. Based on your answers B) and C), is it a project worth investing? Why?
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Financial Management 101 Get A Grip On Your Business Numbers
Authors: Angie Mohr
2nd Edition
1551808056, 978-1551808055
