Great Lakes Clinic has been asked to provide exclusive healthcare services for next years World Exp Show more Great Lakes Clinic has been asked to provide exclusive healthcare services for next years World Exposition.
Although flattered by the request the clinics managers want to conduct a financial analysis of the project. An up-front cost of $160000 is needed to get the clinic in operation. Then a net cash inflow of $1 million is expected from operations in each of the two years of the exposition. However the clinic has to pay the organizers of the exposition a fee for the marketing value of the opportunity. This fee which must be paid at the end of the second year is $2 million. a. what are the net cash flow associated with the project? b. what is the projects IRR? c. Assuming a project cost of capital of 10 percent what is the projects NPV? Show less
Meredith S. Murphy
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