Question
Review this weeks Learning Resources. Reflect on concepts of time value of money, net present value, internal rate of return, and purchasing options. The Assignment:
Review this weeks 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 $24,000 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. 3 years from now b. 6 years from now c. 9 years from now d. 12 years from now 2. The Chief Financial Officer of a hospital needs to determine the present value of $120,000 investment received at the end of year 5. What is the present value if the discount rate is: a. 3% b. 6% c. 9% d. 12% 3. The Kadries dental group purchased a new diagnostic machine for their office for $1,200,000. The expected cash flows for each year of the five year period is $140,000, $175,000, $199,000, $218,000, and $245,000 for the five years. What is the internal rate of return or the 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 Problem 3.
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