Question
The director of capital budgeting for Big Sky Health Systems has estimated the following cash flows ( in thousands of dollars) for a proposed new
The director of capital budgeting for Big Sky Health Systems has estimated the following cash flows ( in thousands of dollars) for a proposed new service:
| Year | Expected Net Cash Flow |
| 0 | ($100,000) |
| 1 | 70,000 |
| 2 | 50,000 |
| 3 | 20,000 |
The projects opportunity cost of capital is 10 percent.
a. What is the projects payback period?
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