The Ward County Hospital Center wants to buy a new mobile rimary care van to use in screening residents in an underserved local neighborhood. The van will last for 5 years and costs $68,000. WCHC pay for the acquisition and maintenance of the van partially from foundation grants and partially from receipts from the county health department. The county has agreed to reimburse WCHC $15 for each patient it screens using the new van. They expect to serve 800 patients per year with the van. It will cost $3,000 per year to maintain the vehicle, and includes all relevant costs. WCHC uses a discount rate of 5 percent.

How much will WCHC need in foundation grants this year to make the purchase break-even financially?

Hint:

• What is the net present value of the costs of buying and operating the van over its lifetime, less the payments that will be received from the county?
• Are the payments from the county sufficient?
• If not, how much must be raised in grants before the van is purchased?