Workshop 6B Essay
Evaluate budget
Evaluate the next case and choose which is the best project.
The manager of a hospital intends to compare two investment projects, in order to provide the same number of new medical services to the community. The initial investment of each project, as well as their respective cash flows are shown in the following table:
Project To B
Initial investment $600,000 $600,000
Flow year 1 $300,000 $100,000
Flow year 2 $300,000 $200,000
Flow year 3$100,000$300,000
Flow year 4$50,000$400,000
Flow year 5 $0$500,000
Which of the two is a better project for the recovery period?
