Calculate each projects payback NPV and IRR

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Assume you are the CFO at Porter Memorial Hospital. The CEO has asked you to analyze 2 proposed capital investments- Project X and Project Y. Each project requires a net investment outlay of $ 10,000, and the opportunity cost of capital for each project is 12%. 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 project's payback, NPV and IRR.

 

b. Which project or projects is financially acceptable. Explain your answer.

Reference no: EM13890273

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