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5. (30pt) The world's largest carpet marker has just completed a feasibility study of what to do with the 16,000 tons of overruns, rejects, and

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5. (30pt) The world's largest carpet marker has just completed a feasibility study of what to do with the 16,000 tons of overruns, rejects, and remnants it produces every year. The company's CEO launched the feasibility study by asking, why pay someone to dig coal out of the ground and then pay someone else to put our waste into a landfill? Why burn our own wasted? The company is proposing to build a $10-million power plants to burn its waste as fuel, thereby saving $2.8million a year in coal purchases. Company engineers have determined that the waste-burning plant will be environmentally sound, and after 4 years, the plant can be sold to a local electric utility for $5million. Assume that MARR is 15% per year. We want to know whether this 4-year project should be undertaken. a) (10pt) Use the NPV method. b) (10pt) Use the IRR method with linear interpolation. c) (10pt) Use the ERR method

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