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The Clinic has been asked to provide healthcare services for the upcoming Boston Calling concert event...

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Finance

The Clinic has been asked to provide healthcare services for theupcoming Boston Calling concert event and next year’s event. Theyare the sole provider for both years. The clinic’s managers willconduct a financial analysis of the overall two year project. Anup-front cost of $100,000 prior to the Year 1 event (= Year 0Today) is needed to get the on-site clinic ready. , A net cashinflow of $250,000 is expected from the event organizers for eachof the two years bands will perform ($250,00 both Year 1 & Year2). However, Ogunquit Clinic has been also been asked to pay amarketing & branding fee as the exclusive provider of on-sitehealth services. This $300,000 fee must be paid at the close of theBoston Calling event in Year 2. (5 points each, 10 pointstotal)a.Assuming a capital cost of 10%, what is project’s netpresent value (NPV)?b. Assume that the marketing & branding feedoes not have to be paid and the only variables are the $100,000Year 0 Today outflow and the two $250,000 inflows (Saturday &Sunday). What is the project’s internal rate of return (IRR)?

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