1. Assume that the discount rate of 10 percent used in the tables bellow is reduced to 5 percent, and everything else is unchangedconduct a cost benefit analysis.

2. Conduct a CBA in which the cost of ineffective replacement increases to $65, with everything else unchanged.

3. Finally, if the city decides to purchase QTS (an equipment) regardless of the CBA results, but wants to extend its lifetime of use until a positive NPV is produced, how long should the city keep QTS?

Present Value of Benefit for QTS

Present Value of QTS	Year Time Saving	Accurate Diagnosis	Salvage Value
0 (current year)	1,248	2,600	692
1	1,335	2,364	0
2	1,031	2,149	0
3	938	1,953	0
4	852	1,776	0
5	775	1,614	0
Total	5,979	12,456	692

Present Value of Cost for QTS

Year	Purchasing Cost	Operating Cost
0 (current year)	21,400	280
1	0	254
2	0	231
3	0	210
4	0	191
5	0	174
Total	21,400	1,340

Thank you