Determine net present value

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Reference no: EM131955187

1. If a physician deposits $24,000 today into a mutual fund that is expected to grow at an annual rate of 8%, what will be the value of this investment:

What is the future value factor for each?

a. 3 years from now

b. 6 years from now

c. 9 years from now

d. 12 years from now

2. The Chief Financial Officer of a hospital needs to determine the present value of $120,000 investment received at the end of year 5. What is the present value if the discount rate is:

a. 3%

b. 6%

c. 9%

d. 12%

What is the present value factor for each?

3. The Forbes OBGYN group purchased a new diagnostic machine for their office for $900,000. The expected cash flows for each year of the five year period is $120,000, $155,000, $186,000, $208,000, and $225,000 for the five years. What is the internal rate of return or the IRR for the project?

4. Determine the Net Present Value for Problem 3 with an interest rate of 10%. Do you proceed or not with the project?

5. Determine the Payback Period for Problem 3.

Reference no: EM131955187

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