Radiology Associates is considering an investment, which will cost $259,000. The investment produces no cash flows for t
Posted: Sun Jun 05, 2022 5:36 pm
Radiology Associates is considering an investment, which will
cost $259,000. The investment produces no cash flows for the first
year. In the second year, the cash inflow is $58,000. This inflow
will increase to $150,000 and then $200,000 for the following two
years before ceasing permanently. The firm requires a 14 percent
rate of return and has a required discounted payback period of 3.5
years. Accept or reject this project? Why?
cost $259,000. The investment produces no cash flows for the first
year. In the second year, the cash inflow is $58,000. This inflow
will increase to $150,000 and then $200,000 for the following two
years before ceasing permanently. The firm requires a 14 percent
rate of return and has a required discounted payback period of 3.5
years. Accept or reject this project? Why?