Thanks. Movie certficate is good towards one admission (up to $10.00to to SOOO t

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Thanks. Movie certficate is good towards one admission (up to $10.00to to SOOO total value) to seeany movie at particpatrg nesten n ee US any showing including moo void if not used within 2 months from the date of onine code activation f lost, car g theator box office to redeen hen u one aonsson al theater listing guides. Reward code void if not activated by 07/31/2016 and certificate pted No cash value No change will be provided internet access and printer n US and valid for idos ues not i required, and must bring printed certificate to the d it cost of movie ad-sson is more than maonun val use only Not for resale:, void if sold or exchanged if cost of movie admission is more than maimum velue of sponsor or eo sponsor of this program Mone certificate is powered by Fandango Loyaty Solitons uc 2016 Fandango Loyaty cfthe movie . Marshall Healthcare System, a not-for-profit hospit Ithcare System, a not-for-profit hospital, is planning on opening an imaging center including MRI, x-ray, ultrasound, and CT. The new center will generate $3 million per year in revenues for 5 years. Expected operating expenses, excluding depreciation, would increase expenses by $1.2 million per year for the next 5 years. The initial capital investment outlay for the project is $5.5 million, which will be depreciated on a straight line basis to a The salvage value in year 5 is $800,000. The cost of capital for this project is 12% savage value. Compute the NPV in the IRR to determine the financial feasibility of the project a.

Explanation / Answer

cash outflow 5500000 Year cashflow expenses savings present value of cash flow@12% present value 1 3000000 1200000 1800000 0.892857 1607143 2 3000000 1200000 1800000 0.797194 1434949 3 3000000 1200000 1800000 0.71178 1281204 4 3000000 1200000 1800000 0.635518 1143933 5 3000000 1200000 1800000 0.567427 1021368 800000 0.567427 453941.5 sum of present value of cash inflow 6942539 cash outflow 5500000 NPV 1442539 savings present value of cash flow@20% present value 1800000 0.8 1440000 1800000 0.64 1152000 1800000 0.512 921600 1800000 0.4096 737280 1800000 0.32768 589824 800000 0.32768 262144 sum of present value of cash inflow 5102848 cash outflow 5500000 NPV -397152 IRR lower rate +( lower rate npv/ lower rate npv - higher rate npv)difference in rate lower rate lower rate npv/lower rate npv- higher rate npv difference in rate 12 0.78412 13 IRR 22.19356 percent

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