Consider two options to buy equipment for your emergency department. You are given the choice to pay $15,000 in cash now, or pay zero upfront, but make four payments of $5,000. If the cost of capital is 2.5%, which is the best based on NPV?
This might help illustrate the solution. I look at NPV of each cash flow. i.e. take each payment and calculate the PV of that future amount. $5000/1.025 means that $5000 in a year is worth $4878 if discounted by the 2.5%. The effect compounds, (1.025)^2 for year 2 etc.
At a glance, a total $20K would require a far higher cost of capital to make those payments preferable to the $15K lump sum.