An electronic health records (EHR) system costs $\$ 100,000$ to implement. Relative to other physician office practices, there are projected cost saving in the first year of operation in addition to improved workflow proficiency. Is estimated that approximately $5 \%$ cost improvements will occur year-over-year. Although the installation of the system is becoming the industry standard in patient record-keeping, the managers of the practice want to know if this will have been "worth the effort five years from now." Assume a hurdle rate of $15 \%$ per year.

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Performance Results Cost Savings Probability in First Year Optimistic 0.30 $60,000 Most Likely 0.55 $40,000 Pessimistic 0.15 $18,000