1. Essay: NPV, IRR, MIRR, Payback
Each of these tools are used to make capital investment decisions. Describe each and provide at least one example. Compare and contrast each and describe the pros and cons. Identify which you would prefer to use, and explain your rationale.
2. Refer to the local clinic scenario introduced in Module 3 along with capital budgeting process introduced in 586 of the text. Assume that you have a corporate cost of capital of 8%. Break down your clinic into departments (rather than divisions as provided in Exhibit 15.8), and assign High, Average, or Low Risk to each. Then, identify projects or capital investments required by each department and classify the risk. Present your findings in the format provided in Exhibit 15.8 on page 587. Along with your results, explain your rationale for the assignment of risk as well as your selected interest rate.
- 1000-1250 words; answers must thoroughly address the questions in a clear, concise manner
- Include a title page and reference page in APA style
- Include the appropriate APA style in-text citations and references for all resources utilized to answer the questions