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 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 Kadrie's 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.