Financial Management In Healthcare

Financial Management In Healthcare

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FINANCIAL MANAGEMENT (HCM-213)

                                                ASSIGNMENT 2

          Total of 10 Marks

Last Date for Submission 04/04/2018

 

 

Q1: Al Amal Hospital is expecting its new center to generate the following cash flows:

Years 0 1 2 3 4 5
Initial
investment
($30,000,000)
Net operating cash flows $6,000,000 $8,000,000 $16,000,000 $20,000,000 $30,000,000

 

  1. Determine the payback for this new center.
  2. Determine the net present value using a cost of capital of 15 percent. Should the project be accepted?

Q2. Assume a zero coupon Bond with a $1000 Par Value and 15-year maturity, calculate its rate of return if the market price equal $315.240.

 Q3. A tax exempt bond was issued at a 10% coupon bond and a maturity of 15 years. The Par Value of the bond is $1000.

At what required market rate (10%, 5% or 14%) does the above bond sell at a discount? At a premium?