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DATA INPUT
Construction Costs 780,000$
First Installment (20x0) 390,000$
Second Installment (20x1) 390,000$
Equipment (paid in 20x1) 150,000$
Staffing costs (per year)(start 20x2) 800,000$
Other operating costs (per year) 200,000$
Increased Charitable Contributions 250,000$
Annual Cost Savings 1,000,000$
Major Reburbishment (20x5) 180,000$
Selling clinic in (20x9) 290,000$
Hurdle Rate 12%
SOLUTION
0 1 2 3 4 5 6 7 8 9
Type of Cash Flow 20x0 20x1 20x2 20x3 20x4 20x5 20x6 20x7 20x8 20x9
(7)Cost of Refurbishment (180,000)$
(9)Salvage Value 290,000$
Incremental Cash Flow (390,000)$ (540,000)$ 250,000$ 250,000$ 250,000$ 70,000$ 250,000$ 250,000$ 250,000$ 540,000$
