Running head: FINANCIAL MANAGEMENTFinancial ManagementNameInstitution12FINANCIAL MANAGEMENTFinancial ManagementThe financial consultant of the metropolitan hospital has to highlight the merits and thedemerits of the two projects at hand and evaluate each one of them independently to estimatewhich facility will bring in profits over the other one. This calls for step by step proceduresand approaches that have to be implemented in order to determine which project is worthinvesting in with the limited and scarce resources.The following are the concepts that are used in assessing the validity of the two mutualexclusive projects in the hospital in context (Building a rehab Center or Build a NeotanalWing).Net Present Value (NPV)Return on Investment (ROI)Profitability Index (PI)Net Present ValueThe Net Present Value is a financial terminology that is used to describe the methodologies thatare used or involved in determining the current flow of the entire cash flows that are beinggenerated by a project after taking into account the initial capital invested into the project. Netpresent value is majorly applied during capital budgeting by organization when they are trying todetermine which project is likely to return great profits over the other ones in their list of projects(Baucells, 2018).3FINANCIAL MANAGEMENTThere are normally two approaches or formulas that are used in determining NPV depending onthe consistency of returns gen ...
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