Health Medical Homework Help

Required Reading

Anonymous. (2012). Hospital financing options for the future. Healthcare Financial Management, 66(8), 1-8.

Anonymous. (2012). Hospital perspectives and capital planning debt management. Healthcare Financial Management, 66(1), 1-2.

Avery, A. E., Flaherty, S. M. V., & Rhee, M. (2011). Fortifying
the payback period method for alternative cash flow patterns. Journal of Financial and Economic Practice, 11(2), 1-9.

Juhasz, L. (2011). Net present value versus internal rate of return. Economics & Sociology, 4(1), 46-53.

Kaplan, H. L., & Singh, A. (2009). The opportunity and “duty” to restructure nonprofit health care debt. American Bankruptcy Institute Journal, 28(5), 14, 66-68.

McFarlane, A. (2013). Refinancing hospital loans. Journal of Policy Development and Research, 15(2), 273-282.

U.S. Securities and Exchange Commission. (2016). Annuities: What are annuities? https://investor.gov/introduction-investing/basics…

Time Value of Money and Basics of Capital Budgeting

Pearland Medical Center is considering two proposed capital
investment opportunities, Project A and Project B. Each project requires
a net investment of $100,000. The cost of capital for each project is
12 percent. The projects’ expected cash revenues are:

Year	Project A	Project B
0	($100,000)	($100,000)
1	$62,500	$32,625
2	$30,000	$32,625
3	$28,000	$32,625
4	$10,000	$32,625

1. Calculate each project’s payback period, net present value, and
   internal rate of return. Explain which project is financially
   acceptable.
2. Avery, Flaherty, and Rhee (2011) noted that when choosing a capital
   budgeting decision tool, academics recommend NPV as the primary approach
   followed by IRR. What are the advantages and disadvantages of NPV and
   IRR methods in regards to profitability analysis in evaluating
   investment decisions?
3. Why are firms using the payback period method as a primarily decision-making tool?

Length: 3 pages, excluding title page and references.