Exercise on Pay back Period XYZ College of Nursing is considering investing in a new facility and the following cash flows are expected to result from the investment: Year Cash Outflow Cash Inflow 1 Php 1,900,000 Php 100,000 2 550,000 200,000 360,000 4 480,000 510,000 600,000 7 590,000 8 300,000 9. 250,000 10 250,000 *What is the payback period of this uneven cash flow? 3.

Exercise on Pay back Period XYZ College of Nursing is considering investing in a new facility and the following cash flows are expected to result from the investment: Year Cash Outflow Cash Inflow 1 Php 1,900,000 Php 100,000 2 550,000 200,000 360,000 4 480,000 510,000 600,000 7 590,000 8 300,000 9. 250,000 10 250,000 *What is the payback period of this uneven cash flow? 3.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3EA: If a copy center is considering the purchase of a new copy machine with an initial investment cost...

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If a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, what is the payback period?
If a garden center is considering the purchase of a new tractor with an initial investment cost of $120,000, and the center expects a return of $30,000 in year one, $20,000 in years two and three. $15,000 In years four and five, and $10,000 in year six and beyond, what is the payback period?
Alameda Hospital is expecting its new cancer center to generate the following cash flows: Givens Years 0 1 2 3 4 5 Initial investment ($30,000,000) Net operating cash flows $6,000,000 $8,000,000 $16,000,000 $20,000,000 $30,000,000 Determine the payback for the new cancer center in years. Determine the net present value (NPV) using a cost of capital of 15%. Determine the NPV at a cost of capital of 20%. Determine the internal rate of return (IRR) using a cost of capital of 20%. Should the project be accepted at a cost of capital of 15%? Should the project be accepted at a cost of capital of 20%?
Alameda Hospital is expecting its new cancer center to generate the following cash flows: Givens Years 0 1 2 3 4 5 Initial investment ($30,000,000) Net operating cash flows $6,000,000 $8,000,000 $16,000,000 $20,000,000 $30,000,000 Determine the payback for the new cancer center in years. Determine the net present value (NPV) using a cost of capital of 15%. Determine the NPV at a cost of capital of 20%. Determine the internal rate of return (IRR) using a cost of capital of 20%. Should the project be accepted at a cost of capital of 15%? Enter ACCEPT or REJECT as your answer. Should the project be accepted at a cost of capital of 20%? Enter ACCEPT or REJECT as your answer.