Jack and Jills Place is a nonprofit nursery school run by the parents of the enrolled children. Since the school is out of town, it has a well rather than a city water supply. Lately, the well has become unreliable, and the school has had to bring in bottled drinking water. The schools governing board is considering drilling a new well (at the top of the hill, naturally). The board estimates that a new well would cost $2,925 and save the school $540 annually for 10 years. The schools hurdle rate is 8 percent.

Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.)

Required:

Compute the new wells net present value. Should the governing board approve the new well? (Round your final answer to the nearest dollar amount.)

Exhibit 14-4 Flight-Route Decision: Worldwide Airways (b) Revenues and Costs under Two Alternatives (a) (c) Nonstop With Stop in Differential Relevant or Irrelevant Route San Francisco Amount: (a) (b) Relevant (1) Passenger revenue $240,000 $258,000 $(18,000) Irrelevant (2) Cargo revenue 80,000 80,000 -0- Relevant (3) Landing fee in San Francisco -O (5,000) 5,000 Relevant (4) Use of airport gate facilities (3,000) 3,000 Relevant (5) Flight crew cost (2,000) (2,500) 500 Relevant (6) Fuel (21,000) (24,000) 3,000 Relevant (7) Meals and services (4,000) (4,600) Irrelevant (8) Aircraft maintenance (1,000) (1,000) Total revenue less costs $292,000 $297,900 $ (5,900) -0- 600 *In columns (a) and (b), parentheses denote costs and numbers without parentheses are revenues. In column (c), parentheses denote differential items favoring option (b)