assume that you are the cheif financial officer at porter memorial hospital. the CEO has asked you to analyze two proposed capital investments- project X and Project Y. Each project requires a net investment outlay of $10,000 and the cost of capital for each project is 12 percent. The projects expected net cash flows are as follows:
YEAR ___ PROJECT X _____ PROJECT Y
0 _____ ($10,000) ______ ($10,000)
1 _____ 6,500 ______ 3,000
2 ______ 3,000 _______ 3,000
3 _______ 3,000 ________ 3,000
4 _______ 1,000 ________ 3,000
a. calculate each projest’s payback period, net present value(NPV), and internal rate of return(IR).
b. which project(or projects) is financially acceptable? explain your answer.
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