16. Colusa Regional Medical Center expects Alpha Project and Beta Project to generate the following: Alpha Project (in '000s) Givens Years 1 2 3 4 1 Initial investment ($20,000) 2 Net operating cash flows ($10,000) $8,000 $12,000 $15,000 $26,000 Beta Project (in '000s) Givens Years 1 2 3 4 1 Initial investment ($28,000) 2 Net operating cash flows $8,000 $8,000 $8,000 $8,000 $8,000 a. Determine the payback for both projects. b. Determine the IRR. Determine the NPV at a cost of capital of 20 percent. с.
16. Colusa Regional Medical Center expects Alpha Project and Beta Project to generate the following: Alpha Project (in '000s) Givens Years 1 2 3 4 1 Initial investment ($20,000) 2 Net operating cash flows ($10,000) $8,000 $12,000 $15,000 $26,000 Beta Project (in '000s) Givens Years 1 2 3 4 1 Initial investment ($28,000) 2 Net operating cash flows $8,000 $8,000 $8,000 $8,000 $8,000 a. Determine the payback for both projects. b. Determine the IRR. Determine the NPV at a cost of capital of 20 percent. с.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![16. Colusa Regional Medical Center expects Alpha Project and Beta Project to generate the
following:
Alpha Project (in '000s)
Givens
Years
1
2
3
4
5
1
Initial investment
($20,000)
2 Net operating cash flows
($10,000) $8,000 $12,000 $15,000 $26,000
Beta Project (in '000s)
Givens
Years
1
4
5
1
Initial investment
($28,000)
2 Net operating cash flows
$8,000 $8,000
$8,000
$8,000
$8,000
а.
Determine the payback for both projects.
b. Determine the IRR.
С.
Determine the NPV at a cost of capital of 20 percent.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0c68ab07-d615-483b-b2bd-94c28bc98521%2F567e5364-a5db-4542-9d7a-9b1b7576cc44%2Fysweuhb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:16. Colusa Regional Medical Center expects Alpha Project and Beta Project to generate the
following:
Alpha Project (in '000s)
Givens
Years
1
2
3
4
5
1
Initial investment
($20,000)
2 Net operating cash flows
($10,000) $8,000 $12,000 $15,000 $26,000
Beta Project (in '000s)
Givens
Years
1
4
5
1
Initial investment
($28,000)
2 Net operating cash flows
$8,000 $8,000
$8,000
$8,000
$8,000
а.
Determine the payback for both projects.
b. Determine the IRR.
С.
Determine the NPV at a cost of capital of 20 percent.
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