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Mark Air is building an addition onto its operation in Fairbanks. The addition totals 27,000 square feet. The construction costs are estimated to be $40

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Mark Air is building an addition onto its operation in Fairbanks. 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 Mark Air uses is 7% APR, compounded quarterly. For part a, calculate your answer to 4 decimal places. Format 0.0000 Leave in decimal form, Do not convert to percent. a. What is the APY for this project? For parts b and c calculate your answer to the nearest whole dollar. Format 0000 No commas b. Determine the capital recovery cost of the addtion. $ c. Determine the AW of the addition. $ d. Based on the above information, is this project economically justified? O A. Yes, Likely PW Greater Than 0 B. No, AW is less than 0 C. No, Likely FW Less than 0 OD. I am guessing, maybe

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