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Which project is financially acceptable

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Reference no: EM133072727

Assume you are the chief financial officer at Lehman Memorial Hospital. The CEO has asked you to analyze two proposed capital investment Project X and project Y each project requires a net investment outlay of $10,000 and the opportunity cost of capital for each project is 14% the project's expected net cash flows are as following:

Year

Project x

Project Y

0

(10,000)

(10,000)

1

6,500

3,000

2

3,000

3,000

3

3,000

3,000

4

1,000

3,000

Calculate each project's payback, NPV and IRR.

Which project is financially acceptable? Explain your answer.

Reference no: EM133072727

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