What are the cash flows associated with the project

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Question - Great Lakes Clinic has been asked to provide exclusive healthcare services for next year's World Exposition. Although flattered by the request, the clinic's managers want to conduct a financial analysis of the project. There will be an up-front cost of $160,000 to get the clinic in operattion. Then, a net cash inflow of $1 million is expected from operations in each of the two years of the exposition. However, the clinic has to pay the organizers of the exposition a fee for the marketing value of the opportunity. This fee, which must be paid at the end of the second year, is $2 million.

a. What are the cash flows associated with the project?

b. What is the project's IRR?

c. Assuming a project cost of capital of 10 percent, what is the project's NPV?

d. What is the project's MIRR?

Reference no: EM133064099

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