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Your not-for-profit hospital is considering the construction of a new treatment facility that would represent a...

Your not-for-profit hospital is considering the construction of a new treatment facility that would represent a significant departure from the organization’s past activities. The facility would cost $4.5 million this year to construct and is forecasted to generate a surplus of revenues over expenses of $800,000 per year for the next 5 years. At the end of the five years, the facility can be sold for an estimated $1.3 million, but will also require environmental clean-up costs of $600,000.

What is the payback period for this project?

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