The Groveton center was built 15 years ago at a cost of $5 million on land leasedfrom the City of Groveton at a cost of $40,000 per year

The Groveton center was built 15 years ago at a cost of $5 million on land leasedfrom the City of Groveton at a cost of $40,000 per year. The land and buildings willimmediately revert back to the city if the center is closed. The center has annualoperating costs of $2.5 million, all of which will be saved if the center is closed. Inaddition, Fair Lakes allocates $800,000 of common administrative costs to theGroveton center. If the center is closed, these costs would be reallocated to otherambulatory centers. If the center is kept open, Fair Lakes plans to invest $1 millionin a fixed income note, which will earn the $40,000 that Fair Lakes needs for thelease payments.