Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need assistance with this assignment on capital budgeting. Need to determine which method is best for the organization by calculating the time value of

image text in transcribed

I need assistance with this assignment on capital budgeting. Need to determine which method is best for the organization by calculating the time value of money and net present value

image text in transcribed Healthcare Financial Management and Economics Week 10 Assignment Capital Budgeting There are many options to buy capital, including cash purchases, loans, leasing, and other forms of payment. Your goal as a healthcare manager is to determine which method is best for your organization, given its financial and organizational structure (i.e., for-profit or not-for-profit). Time value of money and net present value are two techniques that may help you determine how and when to invest in new capital. For this Assignment, you examine these concepts as they pertain to the healthcare industry. To prepare for this Assignment: Review this week's Learning Resources. Reflect on concepts of time value of money, net present value, internal rate of return, and purchasing options. The Assignment: Use the \"Week 10 Assignment Capital Budget Excel Template\" to show your work, answer the following questions: 1 If a physician deposits $19,000 today into a mutual fund that is expected to grow at an annual rate of 8%, what will be the value of this investment: a b c d 3 years from now 6 years from now 9 years from now 12 years from now 2 The Chief Financial Officer of a hospital needs to determine the present value of $140,000 investment received at the end of year 5. What is the present value if the discount rate is: a b c d 3% 6% 9% 12% 3 An eye Surgeon purchases a new Lasix laser for their office for $700,000. The expected cash flows for each year of five-year period is $114,000, $160,000, $190,000, $ 210,000, and 240,000 for the 5 years. What is the internal rate of return or IRR for the project? 4 Determine the Net Present Value for Problem 3 with an interest rate of 10%. Do you proceed or not with the project? 5 Determine the Payback Period for Question 3 2015 Laureate Education, Inc. Page 1 of 1 Problem 1 A Present Value B Future Value Factor C Future Value Factor B Present Value Factor C Present Value Factor D Future Value a) b) c) d) Problem 2 A Future Value a) b) c) d) Problem 3 IRR Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 IRR= Cash Flow Cummulative Cash Flow % Problem 4 Excel less the investment NPV Accept or do not accept the project Problem 5 What is the payback period for problem 3? D Present Value Payback period = Year before recovery + Year before cummulative cash flow/cash flow for year paid of Payback period (show calculation) = Payback period (show answer)=

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Core Concepts

Authors: Raymond Brooks

4th Edition

134730417, 134730410, 978-0134730417

More Books

Students also viewed these Finance questions

Question

Define self-discipline and cite its benefits.

Answered: 1 week ago

Question

Every business can be socially responsible. True/False

Answered: 1 week ago