California Health Center, a for-profit hospital, is evaluating the purchase of new diagnostic equipment. The equipment, which costs $700,000, has an expected life of five years and an estimated pretax salvage value of $50,000 at that time. The equipment is expected to be used 18 times a day for 250 days a year for each year of the project's life. On average, each procedure is expected to generate $75 in collections, which is net of bad debt losses and contractual allowances, in its first year of use. Thus, net revenues for Year 1 are estimated at 18 X 250 X $75 = $337,500.

Labor and maintenance costs are expected to be $90,000 during the first year of operation, while utilities will cost another $15,000 and cash overhead will increase by $5,000 in Year 1. The cost for expendable supplies is expected to average $7 per procedure during the first year. All costs and revenues, except depreciation, are expected to increase at a 5 percent inflation rate after the first year.

The equipment falls into the MACRS five-year class for tax depreciation and hence is subject to the following depreciation allowances:

YearAllowance year 1 allowance 0.20, year 2 allowance 0.32, Year 3 Allowance 0.19, year 4 allowance 0.12, year 5 allowance 0.11, Year 6 allowance 0.06,

The hospital's tax rate is 20 percent, and its corporate cost of capital is 10 percent.

what is the project's net cash flow at date 0?