Hospital X is expecting its new cancer center to generate the following cash flows:

Year 0 - Initial Investment ($30,000,000)

Year 1 - Net operating Cash Flows $6,000,000

Year 2 - Net operating Cash Flows $8,000,000

Year 3 -Net operating Cash Flows $16,000,000

Year 4 - Net operating Cash Flows $20,000,000

Year 5 - Net operating Cash Flows $30,000,000

a.How do I determine the payback for the new cancer center?

b.How do I determine the net present value using a cost of capital of 15 percent?

c.How do I determine the net present value at a cost of capital of 20 percent, and compute the internal rate of return?

d.Should I accept the project 15% cost of capital? Or 20%.

Hospital Y expects Projects 1 and 2 to generate the following cash flows:

Project 1 (in 000s)

Year 0 Initial Investment (2,800)

Year 1 - Net Operating Cash Flows $300

Year 2 - Net Operating Cash Flows $500

Year 3 - Net Operating Cash Flows $800

Year 4 - Net Operating Cash Flows $1200

Year 5 - Net Operating Cash Flows $2000

Project 2 (in 000s)

Year 0 Initial Investment ($5000)

Year 1 Net Operating Cash Flows $1300

Year 2 Net Operating Cash Flows $1300

Year 3 Net Operating Cash Flows $1300

Year 4 Net Operating Cash Flows $1300

Year 5 Net Operating Cash Flows $1300

a. How do I determine the payback for both projects?

b.How do I determine the IRR?

c. How do I determine the NPV at a cost of capital of 12 percent?

Mandeville Diagnostics expects Project A and Project B to generate the following:

Project A (in 000s)

Year 0 Initial Investment (20,000)

Year 1 Net operating cash flows (10,000)

Year 2 Net operating cash flows 8000

Year 3 Net operating cash flows 12000

Year 4 Net operating cash flows 15000

Year 5 Net operating cash flows 26000

Project B (in 000s)

Year 0 Initial Investments (28,000)

Year 1 Net operating cash flows 8000

Year 2 Net operating cash flows 8000

Year 3 Net operating cash flows 8000

Year 4 Net operating cash flows 8000

Year 5 Net operating cash flows 8000

a.How do I determine the payback for both projects?

b.How do I determine the IRR?

c.How do I determine the NPV at a cost of capital of 20 percent?