Week 10 Assignmont-Capital Budgeting There are many options to buy capital, incl

Question

Week 10 Assignmont-Capital Budgeting There are many options to buy capital, including cash purchases, loans, leasing and other foms method is best for your for-profit or not-for-profit). Time ochniques that may help you determine how and when to invest in new capital. of payment Your goal as a healthcare manager is to determine which given its financial and organizational structure (Ce value of money and net present value are two For this To prepare for this Assignment Review this week's Learning Resources. Reflect on concepts of time value of money net present value, internal rate of return, and purchasing options The Assignment Using an Excel spreadsheet to show your work, answer the following questions: 1. If a physician deposits $24,000 today into a mutual fund that is expected to grow at an annual rate of 8%, what will be the value of this investment: a. 3 years from now b 6 years from now c. 9 years from now d. 12 years from now The Chief Financial Officer of a hospital needs to determine the present value ot $120,000 investment received at the end of year 5 What is the present value if the discount rate is 2- a. 3% b.696 C. 9% d. 12%

Explanation / Answer

1 Present Value Years FV Factor Future Value A B C AxC a $24,000 3 1.2597 $30,233.09 b $24,000 6 1.5869 $38,084.98 c $24,000 9 1.9990 $47,976.11 d $24,000 12 2.5182 $60,436.08 2 Future Value Years FV Factor Present Value A B C AxC a $120,000 3 0.7938 $95,259.87 b $120,000 6 0.6302 $75,620.36 c $120,000 9 0.5002 $60,029.88 d $120,000 12 0.3971 $47,653.65

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