GULF SHORES SURGERY CENTERS TIME VALUE ANALYSIS GARY HUDSON was born and raised in Pensacola, Florida. He obtained his bachelor's degree in business from Florida State Uni versity, where he enrolled in the NROTC (Naval Reserve Officers Training Corps) program. After graduation, he received a commission in the US Marine Corps. Following his release from active duty, Gary used his GI Bill benefits to obtain a master's degree in health services administration from the University of Florida. His first job in health- care was as a special projects coordinator/financial analyst at a large Miami hospital. He enjoyed his work there, but his ultimate goal was to return to Pensacola as the manager of a smaller healthcare business, where he would have more responsibility and authority. After five years in Miami, Gary became the chief operating and financial officer of Gulf Shores Surgery Centers, an investor-owned chain of ambulatory surgery centers with six locations in Florida's Panhandle. Immediately after assuming his new position, Gary found himself facing several decisions. First, Gary had to select a bank or banks to meet the financial needs of Gulf Shores. He has approached two local banks-Sun Trust and BankSouth-about the interest rates they offer on a savings account and a certificate of deposit (CD) as well as the rate charged on a term loan (Exhibit 12.1). Second, a wealthy patient was so impressed with the care she received at Gulf Shores that she decided to make a series of donations to the facility. She will donate $75,000 a year for the first six years (t = 1 through t = 6, where t = time) and $150,000 annually for the fol- lowing six years (t = 7 through t = 12). The first deposit will be made a 93 HAP, 2014. Reproduction without permission is prohibited. 12