Company A is building an addition. The addition totals 27,000 square feet. The construction costs are estimated to be $40 per square feet. The company estimates $50,000 per year in fixed costs (e.g., maintenance and insurance, etc.) and $2 per square foot in variable costs (e.g., utilities, etc.) for the additional facility. The market value of the addition is expected to be $356,400 at the end of 20 years. Once fully operational the addition is expected to generate $200,000 per year in revenue. The interest rate Company A uses is 7% APR, compounded quarterly.

a. What is the APY for this project? (4 decimal places)

b. Determine the capital recovery cost of the addition. (nearest dollar)

c. Determine the AW of the addition. (nearest dollar)

d. Based on the above information, is this project economically justified?