What is project net present value

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Clinic has been asked to provide healthcare services for the upcoming Boston Calling concert event. They are the sole provider. The clinic's managers will conduct a financial analysis of the project. An up-front cost of $100,000 prior to the event (= Year 0 Today) is needed to get the on-site clinic ready. A net cash inflow of $250,000 is expected from the event organizers for each of the two days bands will perform ($250,00 both Saturday and Sunday). However, Ogunquit Clinic has been asked to pay a marketing & branding fee as the exclusive provider of on-site health services. This $300,000 fee must be paid at the close of the Boston Calling event on Sunday afternoon.

a. Assuming a capital cost of 10%, what is project's net present value (NPV)?

b. Assume that the marketing & branding fee does not have to be paid and the only variables are the $100,000 Year 0 Today outflow and the two $250,000 inflows (Saturday & Sunday). What is the project's internal rate of return (IRR)?

Reference no: EM132390800

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