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Section A: The investment decision Question #1 (25 points) The MHA Medical Center expects Project A and Project B to generate the following cash flows:

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Section A: The investment decision Question #1 (25 points) The MHA Medical Center expects Project A and Project B to generate the following cash flows: Project A (in thousands) Initial investment _ ($20.,000) Net operating cash flows ($10,000) $8.,000 $12,000 $15,000 Project B (in thousands) Initial investment ($28.,000) Net operating cash flows . $8,000 $8,000 $8,000 1) Compute the payback for both projects. Show your calculation below: 2) Compute the Net Present Value (NPV) manually (i.e., do not use excel spread sheet) for both projects at a cost of capital of 20%. Show your calculation below: (Hint: Use the Present Value Factors presented Zelman's textbook pp.297-298)

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