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Please use excel functions to answer the following question set The Hospital for Ordinary Surgery is considering a new lab. The lab will cost $5
Please use excel functions to answer the following question set
| The Hospital for Ordinary Surgery is considering a new lab. The lab will cost $5 million and is expected to generate the cash flows shown below. If the | |||
| hospital's cost of funds is 10%, answer the following questions | |||
| Start | Year 1 | Year 2 | Year 3 |
| -5,000 | 1,700 | 1,500 | 1,500 |
| a. What is the return expected on this investment measured in dollar terms (NPV)? b. Provide an explanation, in economic terms, of your answer. | |||
| c. What is the return on this investment measured in percentage terms (IRR)? What is the Modified Internal Rate of Return (MIRR)? Which one is a better indicator of a project's profitability? Why? | |||
| d. Should this investment be made? Explain your answer. | |||
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Fundamentals of Investment Management
Authors: Geoffrey Hirt, Stanley Block
10th edition
0078034620, 978-0078034626
