Determine the payback for the new dialysis unit

Reference no: EM131107581

Buxton Community is expecting its new dialysis unit to generate the following cash flows:

Givens	Years	0	1	2	3	4	5
Initial investment		($10,000,000)
Net operatios cash flows			($1,500,000)	($2,000,000)	($4,000,000)	($7,000,000)	($14,000,000)

a. Determine the payback for the new dialysis unit.

b. Determine the NPV using a cost of capital of 11 percent.

c. Determine the NPV at a cost of capital of 20 percent and compute the IRR.

d. At an 11 percent cost of capital, should the project be accepted? At a 20 percent cost of capital, should the project be accepted? Explain.

Reference no: EM131107581

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