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1. (5 pointy) Horizon Wireless must rebuild a cell tower recently destroyed by a tonado. If made of normal steel, the tower will cost $30,000
1. (5 pointy) Horizon Wireless must rebuild a cell tower recently destroyed by a tonado. If made of normal steel, the tower will cost $30,000 to construct and should last 18 years. Maintenance will cost $1,000 per year. If corrosion resistant steel is used, the tower will cost $36,000 Determine the IRR of building the corrosion resistant tower. If Horizon requires a return of 9% on its capital projects, which tower should they build? (5 points) A construction company must replace a piece of heavy earth-moving equipment. Cat and Volvo are the two best alternatives. Both alternativ the company has a minimum attractive rate of return (MARR) of 11%, which alternative should be chosen? Use IRR analysis. to build and the annual maintenance cost will be reduced to $250 per year 2. Cat $15,000 $22,500 Volvo First cost Annual operating cost 3,000 1,500 Salvage value 2,000 4,000
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