for problem 14.6

a. Calculate each project's payback period, net present value (NPV), and internal rate of return (IRR). b. Which project (or projects) is financially acceptable? Explain your answer. 14. The director of capital budgeting for Big Sky Health Systems, Inc., has estimated the following cash flows in thousands of dollars for a proposed new service: Year 0 Expected Net Cash Flow ($100) 70 50 2 3 20 The project's cost of capital is 10 percent. a. What is the project's payback period? b. What is the project's NPV? c. What is the project's IRR? Its MIRR? 14.7 California Health Center, a for-profit hospital, is evaluating the purchase of new diagnostic equipment. The equipment, which costs $600,000, has an expected life of five years and an estimated pretax a. Calculate each project's payback period, net present value (NPV), and internal rate of return (IRR). b. Which project (or projects) is financially acceptable? Explain your answer. 14. The director of capital budgeting for Big Sky Health Systems, Inc., has estimated the following cash flows in thousands of dollars for a proposed new service: Year 0 Expected Net Cash Flow ($100) 70 50 2 3 20 The project's cost of capital is 10 percent. a. What is the project's payback period? b. What is the project's NPV? c. What is the project's IRR? Its MIRR? 14.7 California Health Center, a for-profit hospital, is evaluating the purchase of new diagnostic equipment. The equipment, which costs $600,000, has an expected life of five years and an estimated pretax