If NCU AMC deposits $130,000 today into an investment fund that is expected to grow at an annual rate of 6%, what will be the value of this investment:
1. 2 years from now
2. 4 years from now
3. 7 years from now
NCU AMC is also considering a new surgical robot system for the OR costing a total of $2,300,000 (includes installation). The expected cash flows from each year of the 5-year period is $250,000, $320,000, $350,000, $400,000 and $425,000.
· What is the internal rate of return (IRR) for the project?
· Given an interest rate of 10%, what is the Net Present Value (NPV) for the surgical robot system project?
· Considering the IRR and the NPV, would you recommend that NCU AMC purchase the surgical robot system?
· What factors need to be considered in terms of investing the money for future patient care needs compared with purchasing the robot system for current patient care needs?
· Assess the potential legal and ethical ramifications of the purchase.
Prepare a memo to the CFO that presents the calculation (a photo or scan of the formula and calculation is acceptable) and what the results of the calculation mean.