Service Line Expansion
The Tri-Counties Regional Clinic is considering investing in a new service line.
The expansion project will cost $8 million and is expected to generate the following cash flows.
If the clinic's cost of funds is 8%, is the project justified on a NPV basis?
	Year 0	Year 1	Year 2	Year 3	Year 4	Total
Cash Inflows from New Services		$2,900,000	$3,000,000	$3,100,000	$3,200,000	$12,200,000
Cash Outflows for Increased Costs	($8,000,000)	($750,000)	($800,000)	($850,000)	($900,000)	($11,300,000)
Net Cash Inflows / (Outflows)	($8,000,000)	$2,150,000	$2,200,000	$2,250,000	$2,300,000	$900,000
Annual Interest Rate
	Today	Year 1	Year 2	Year 3	Year 4
Time (t)	0	1	2	3	4
Net Cash Infows/(Outflows)
Present Value
Total Present Value