Question

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Nurse Triage Salaries $ 523,800 $ 549,990 $ 577,490 $ 606,364 $ 636,682 $ 668,516
Forecasted ER Cost Reductions $ 400,000 $ 800,000 $ 848,000 $ 900,577 $ 955,512 $ 1,013,798
New IT Specialist's Salary $ 150,000 $ 154,500 $ 159,135 $ 163,909 $ 168,826 $ 173,891
Costs of Facility Renovations $ 30,000 $ - $ - $ - $ - $ -
Necessary Capital Equipment Purchases $ 117,000 $ 3,510 $ 3,510 $ 3,510 $ 3,510 $ 3,510
Net Cash Flow:
Present Values of Net Cash Flows:
Net Present Value:
IRR:
MIRR:
Payback Period (# *****):
Discounted Payback Period (# *****):


1. Determine the cash inflows and outflows for each year.
2. Evaluate the capital project by calculating the following metrics:
a. net present value (NPV)
b. internal rate of return (IRR)
c. modified internal rate of return (MIRR)
d. payback period
e. discounted payback period
3. Indicate whether the project is acceptable, assuming Jiranna has a corporate policy of not accepting projects that take more than 3.5 years to pay for themselves, and assuming an 11% cost of capital.