Strengths and Weakness of Pay Back Method and NPV

Strengths and Weakness of Pay Back Method and NPV

Q1. Marshall Healthcare System, a non-taxpaying entity, is planning to purchase imaging

Equipment, including MRI equipment, for its new imaging center. This equipment is expecting to generate the following cash flows.

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Determine the payback for the new MRI machine and should the project be accepted or rejected? Explain

(2.5 Marks)

Years                    0                     1                       2                3                4                      5
Initial          ($ 15,000,000)

Investment

Net operating

cash flows

 $2,000,000 $4,000,000, $5,000,000 $8,000,000 $16,000,000

 

 

 

Q2. Compare the Strengths and Weakness of Pay back method and NPV (Net Present Value)   

( 2.5 Marks)

Instructions

  • Submit the assignment in word document (attach assignment cover page with filled details)
  • Format the assignment according to APA and Saudi Electronic University writing standards.
  • Assignment submission due date is 27th March 2021