Which project is financially acceptable

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Reference no: EM131169031

Assume you are the Chief Financial Officer at Porter Memorial Hospital. The CEO has asked you to analyze two proposed capital investments - Project X & Project Y.

Each project has a net investment outlay of $10,000 and the opportunity cost for each project is 12%.

You have calculated each project's payback, net present value & internal rate of return as follows:

                 Project X     Project Y
Payback 6.72 years   4.82 years
NPV -       $1,565         $6,267
IRR          9.6%            16.8%

Which project is financially acceptable.

Reference no: EM131169031

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