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2. An airport authority is considering lengthening a runway from 10,000 feet to 15,000 feet. However, maintenance costs will increase by $18,000 per year, and
2. An airport authority is considering lengthening a runway from 10,000 feet to 15,000 feet. However, maintenance costs will increase by $18,000 per year, and every 15 years there's an additional $25,000 expense to upgrade lighting and signage on the runway. But because larger planes will be able to use the airport, income from increased landing fees will increase by $75,000 per year. At what cost would it make sense for the airport authority to go ahead with the lengthening project? Use i=6%. (25)
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