Reference no: EM13477000

Question :- Castle Rock Medical Center expects Projects X and Y to generate the following cash flows:

NOCF = Net Operating Cash Flows

Givens (thousands)	Years	0	1	2	3	4	5
Initial Investment		(6,500)
Project  X NOCF			5,000	3,000	2,000	1,600	1,000
Project Y NOCF			1,000	1,600	2,000	3,000	5,000
Discount rate for Part a	13%
Discount rate for Part b	8%

 

a.       Determine the NPV for both projects using a cost of capital of 13%

b.      Determine the NPV for both projects using a cost capital of 8%

c.       At an 8% discount rate, which project should be accepted?

At a 13% discount rate, which project should be accepted?

 Explain