COMPLETE ALL YELLOW CELLS

# of treatments $1,000 ea. Net Present Value (NPV) # of treatments $1,000 ea. Internal Rate of Return (IRR)

12% Project (opportunity) cost of capital 12% Project (opportunity) cost of capital

-25,000 Cash flow month 0 -25,000 Cash flow month 0

Example: 3 3,000 Cash flow month 1 Example: 3 3,000 Cash flow month 1

Cash flow month 2 Cash flow month 2

Cash flow month 3 Cash flow month 3

Cash flow month 4 Cash flow month 4

Cash flow month 5 Cash flow month 5

Cash flow month 6 Cash flow month 6

-22,321.429 NPV -88% IRR

Hint: for this to be profitible, should NPV be positive or negative?

Hint: For this to be a profitible investment, should IRR exceed the project cost of capital or not?

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