Allegheny Community Hospital is a nonprofit hospital operated by the county. The

hospital's administrator is considering a proposal to open a new outpatient clinic in the

nearby city of New Castle. The administrator has made the following estimates pertinent

to the proposal.

Construction of the clinic building will cost $$760,000$ in two equal installments of

$$380,000,$ to be paid at the end of $200$ and $201.$ The clinic will open on January

$2,202.$ All staffing and operating costs begin in $202.$

Equipment for the clinic will cost $$85,000,$ to be paid in December of $201.$

Staffing of the clinic will cost $$640,000$ per year.

Other operating costs at the clinic will be $$106,000$ per year.

Opening the clinic is expected to increase charitable contributions to the hospital

by $$170,000$ per year.

The clinic is expected to reduce costs at Allegheny Community Hospital. Annual

cost savings at the hospital are projected to be $$840,000.$

A major refurbishment of the clinic is expected to be necessary toward the end of

$205.$ This work will cost $$115,000.$

Due to shifting medical needs in the county, the administrator doubts the clinic

will be needed after $20x9.$

The clinic building and equipment could be sold for $$170,000$ at the end of $209.$

$10.$The hospital's hurdle rate is $12$ percent.

Use Appendix A for your reference. $($Use appropriate factor$($s$)$ from the tables

provided.$)$

Required:

$1-3.$ Fill in the following table to compute the net present value of the proposed

outpatient clinic.

Should the administrator recommend to the hospital's trustees that the clinic be built?