Question: St. Elsewhere Hospital is proposing to do a capital project involving the purchase of lab equipment. The new equipment cost is $12,000. The old equipment

St. Elsewhere Hospital is proposing to do a capital project involving the purchase of lab equipment. The new equipment cost is $12,000. The old equipment purchased 5 years ago cost $6,000. The incremental cash flow of the project are year one $3,000, year two $4,500, year three $5,800, and year four $6,000. The new equipment has zero salvage value. St. Elsewhere as a 19% cost of capital.

Calculate the IRR and NPV

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