4. 4.51 Analon Health, a midsized health care company in Toronto, is considering the addition of one or more of four new services in hospitals. The total amount of investment capital available for new ventures is $800,000. Analon uses a 5-year project recovery period and a MARR of 20% per year. All cash flows are in $1000 units.

(a) Using tabulated factors, determine which one(s) should be undertaken on the basis of a PW analysis.

(b) Make the selection using a spreadsheet and PV functions.

Table Summary: Table divided into 5 columns with the headings marked from left to right as:

Services; R 1; S 2; T 3; and U 4.

Services Rl S2 T3 U4 Initial development, $ −200 −400 −500 −700 M&O cost, $/year −50 −200 −300 −400 Revenue, $/year 150 450 520 770