Rank the projects on the basis of NPV

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Problem - Kildare Medical Center, a for-profit hospital, has three investment opportunities: (1) adding a wing for in-patient treatment of substance abuse, (2) adding a pathology laboratory, and (3) expanding the outpatient surgery wing. The initial investments and the net present value for the three alternatives are as follows: Although the hospital would like to invest in all three alternatives, only $1.5 million is available.

Required - Rank the projects on the basis of NPV, and allocate the funds in order of this ranking. What project or projects were selected? What is the total NPV realized by the medical center using this approach?

Reference no: EM132874632

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