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Part a) Part b) A hospital contracted with you to wash all their linens. It costs $50,000 now to buy the necessary washing machines and
Part a)
A hospital contracted with you to wash all their linens. It costs $50,000 now to buy the necessary washing machines and will cost an additional $30,000 in one year to pay for labor, water and electricity. The he spital will pay you $140,000 in one year. There is no risk that the hospital will default. The risk-free interest rate is 4%. What is the NPV of the contract? IBM is planning to produce an expert system based on artificial intelligence and expects the following cash flows (in \$ million) at the end of each year: The company requires a return of 9% from this project. What is the project's profitability index Part b)
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