The director of capital budgeting for Big River Health Systems Inc. has estimated the following cash flows (in thousands of dollars) for a proposed new service: Year Expected Net Cash Flow ($) 0 (100) 0 (100) 1 70 1 70 2 50 2 50 3 20 3 20 The project’s opportunity cost of capital is 10 percent. What is the project’s payback period? What is the project’s NPV? What is the project’s IRR
The director of capital budgeting for Big River Health Systems Inc. has estimated the following cash flows (in thousands of dollars) for a proposed new service: Year Expected Net Cash Flow ($) 0 (100) 0 (100) 1 70 1 70 2 50 2 50 3 20 3 20 The project’s opportunity cost of capital is 10 percent. What is the project’s payback period? What is the project’s NPV? What is the project’s IRR
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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9.7 The director of capital budgeting for Big River Health Systems Inc. has estimated the following cash flows (in thousands of dollars) for a proposed new service:
Year |
Expected Net Cash Flow ($) |
0 (100) |
0 (100) |
1 70 |
1 70 |
2 50 |
2 50 |
3 20 |
3 20 |
The project’s
- What is the project’s payback period?
- What is the project’s
NPV ? - What is the project’s
IRR ?
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