Q1) Final SLP is devoted to capital budgeting for Trinity’s project. Cost to build facility is $1 million. Cost of capital is 15%. Facility is expected to make $250 thousand in 2nd year and $500 in 3rd year. After that revenue projections are a 25% increase each year.
Based on information from previous SLPs create your final recommendations. Comprise the following:
i) Describe overall financial condition of firm and probability the hospital has enough cash flow over next 5 years to follow project.
ii) Compute and interpret payback and discounted payback periods in addition to NPV, IRR, MIRR, and PI for project.
iii) Final recommendations for pursuing project.