1. Complete Table 4 by adding the cash flows for years four and five. Show all work in your Excel worksheet. 8 points
2. What is the projects payback period, net present value (NPV), and internal rate of return? Interpret each of these measures. Show all work in your Excel worksheet. 10 points
3. What is your final recommendation regarding the proposed outpatient surgery center? 2 points

		Table 4
		Partial Cash Flow Analysis
	0	1	2	3	4	5
Land opportunity cost	($500,000)
Building/equipment cost	($10,000,000)
Net revenues		$5,000,000	$5,150,000	$5,304,500
Less: Labor costs		$800,000	$824,000	$848,720
Utility costs		$50,000	$51,500	$53,045
Supplies		$2,000,000	$2,060,000	$2,121,800
Incremental overhead		$36,000	$37,080	$38,192
Net income		$2,114,000	$2,177,420	$2,242,743
Plus: Net land salvage value
Plus: Net building/equipment salavage value
Net cash flow	($10,500,000)	$2,114,000	$2,177,420	$2,242,743