What is the npv for method a and npv for method b

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Reference no: EM132951601

Capitol Health Plans, Inc. is evaluating two different methods for providing home health services to its members. Both methods involve contracting out for services, and the health outcomes and revenues are not affected by the method chosen. The cost of capital is 9%. The incremental cash flows for the decision are all outflows.

Here are the projected flows:
Year Method A Method B
0 -$300,000 -$120,000
1 -$66,000 - $96,000
2 -$66,000 - $96,000
3 -$66,000 - $96,000
4 -$66,000 - $96,000
5 -$66,000 - $96,000

Problem 1: What is the IRR for Method A and IRR for Method B.

Problem 2: What is the NPV for Method A and NPV for Method B.

Reference no: EM132951601

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