Option A: Building a New Wing 1. One-Time Costs: - Land \& site preparation: $10 million (Year 0 ) - Construction: $100 million ( $50 million in Year 0 and $50 million in Year 1 ) - Medical equipment: $25 million (Year 0 ) - Licensing and consulting: \$15 million (spread across Years 0 and 1) - Initial marketing campaign: \$5 million (Year 2) 2. Annual Values: - Operations \& staff: \$11 million/year (Year 2 onwards) - Maintenance: \$2.5 million/year (Year 2 onwards) - Technology updates: $1.5 million/year (Year 4 onwards) 3. Overhauls: - Equipment repairs: $18 million (Year 10) - Facility upgrades: \$25 million (Year 15) 4. Revenue: - From Year 3 to 10 : Starting at $60 million and increasing by $5 million annually. - From Year 11 onward: Stabilizing at $100 million annually. - Salvage Value of existing equipment: $25 million (Year 20) Option B: Upgrading Existing Infrastructure 1. One-Time costs: - Renovations: \$35 million (Year 0) - Medical equipment: $20 million (Year 0) - Licensing \& consulting: $5 million (Year 0 ) - Initial marketing campaign: \$2 million (Year 1) 2. Annual Values: - Operations \& additional staff: $7 million/year (Year 2 onwards) - Maintenance: \$2 million/year (Year 2 onwards) - Technology updates: \$1.2 million/year (Year 3 onwards) 3. Overhauls: - Equipment repirs: $13 million (Year 10) - Facility upgrades: $20 million (Year 15) 4. Revenue: - From Year 2 to 9: Starting at $18 million and increasing by $5 million annually. - From Year 10 onward: Stabilizing at $58 million annually. - Salvage Value: $15 million (Year 20) Question 3 - Assuming an interest rate of 3% per year (effective), calculate the feasibility of each option. You can use either Present Worth Analysis or Equivalent Uniform Worth Analysis. In this part, your calculation should be done without the use of Excel. Show your equations and the results