1. Assume that a hospital has steady cash inflows of $10,000 for 3 years and cash outflows of $9,500 for this same period. At 10% cost of capital, what is the net present value of this project? Should this project be accepted, assuming there are no limits on capital?

2. Assuming that the initial project investment is $28,500 in year 0, and that $10,000 in benefits accrued annually, calculate the payback period.