9.6 Assume that you are the chief financial officer at Porter Memorial Hospital. The CEO has asked you to analyze two proposed capital investments—project X and project Y. Each project requires a net investment outlay of $10,000, and the opportunity cost of capital for each project is 12 percent. The projects’ expected net cash flows are as follows:
Year
Project X ($)
Project Y($)
0
(10,000)
1
6,500
3,000
2
(3,000
3
4
1,000
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