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Great Lakes Clinic has been asked to provide exclusive healthcare services for next year's World Exposition. The clinic manager’s wanted to conduct a financial analysis of the project. An up-front cost of $160,000 is needed to get the clinic in operation. Then a net cash flow of $1 million is expected from operations in each of the 2 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 2nd year, is $ 2 million.

a. What are the net cash flows associated with the project?

b. Assuming a project cost of 10% capital, what is the project's NPV?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91564848

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