What is the project’s payback?Winston Clinic is evaluating a project that costs $52,125 and has expected net cash flows of $12,000 per year for eight years.
What is the project’s payback?Winston Clinic is evaluating a project that costs $52,125 and has expected net cash flows of $12,000 per year for eight years.
Chapter 11
PROBLEM 1
Winston Clinic is evaluating a project that costs $52,125 and has expected net cash flows of $12,000 per year for eight years. The first inflow occurs one year after the cost outflow, and the project has a cost of capital of 12 percent.
What is the project’s payback?
What is the project’s NPV? Its IRR?
Is the project financially acceptable? Explain your answer.
ANSWER
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