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Cedar Hill Hospital needs to expand its facilities.

Cedar Hill Hospital needs to expand its facilities. They are planning to purchase the property, erect a building, and install fixtures at a total cost of $600,000 to be paid in five installments to be paid as follows: an immediate payment of $200,000, followed by $100,000 payments at the end of current year, and each of the following three years. The annual cash operating costs associated with the new facilities are estimated to be $120,000 per year. The new facilities would be occupied for thirteen years, and would have a resale value of $1,000,000 at the end of the 13-year period.

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