The director of capital budgeting for a health system has the following data:
If the NPV is $20,000, IRR is 23.56% and the payback period is 1.6 years.
1. Is this a viable service? 2. Would you recommend using this service to a hospital board? 3. Would you still recommend if opportunity cost of $15,000 involved by renting the space involved in the new service to an outside entity for 3 years. Why or why not?