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Calculate Project Xs net present value

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Question - Assume that you are the CFO 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 project's expected net cash flows are as follows:

Year Project X and 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 Project X's payback period?

b. Calculate Project Y's payback period?

c. Calculate Project X's net present value (NPV)?

d. Project Y's net present value (NPV)?

Reference no: EM132927173

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