Jefferson Countys Board of Representatives is considering the purchase of a site for a new sanitary landfill. The purchase price for the site is $180,000 and preparatory work will cost $62,950. The landfill would be usable for 10 years. The board hired a consultant, who estimated that the new landfill would cost the county $43,000 per year less to operate than the countys current landfill. The current landfill also will last 10 more years. For a landfill project, Jefferson County can borrow money from the federal government at a subsidized rate. The countys hurdle rate is only 10 percent for this project.

Required: a. Compute the net present value of the new landfill Net present value b. Should the board approve the project? No Yes