Question
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
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.
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Required: Calculate the recovery of investment and return on investment for Jefferson County's landfill project. (Round your answers to the nearest dollar amount. Final answer may be slightly off due to rounding error.) Year Unrecovered investment at beginning of year 242,950 43,000 43,000 43,000 43,000 43,000 43,000 43,000 43,000 43,000 43 Cost savings during year Return on unrecovered investment Recovery of investment Unrecovered investment at end of yearStep by Step Solution
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