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please answer question completely Hele Save & Required Information Use the following information to answer questions 24-26 Jefferson County's Board of Representatives is considering the
please answer question completely
Hele Save & Required Information Use the following information to answer questions 24-26 Jefferson County's Board of Representatives is considering the purchase of a site for a new sanitary landfin. The purchase price for the site is $250,000 and preparatory work will cost $44,400. The landfill would be usable for 10 years. The board hired a consultant, who estimated that the new landfill would cost the county $40,000 per year less to operate than the county's 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 county's hurdle rate is only 4 percent for this project Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Exercise 16-26 Recovery of Investment (Section 1) (LO 16-1, 16-2) 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) Unrecovered investment at beginning of year Cost savings during year Return on unrecovered investment Recovery of investment Unrecovered investment at end of year The owner of Zivanov's Pancake House is considering an expansion of the business. He has identified two alternatives, as follows: Build a new restaurant near the mall. . Buy and renovate an old bullding downtown for the new restaurant The projected cash flows from these two alternatives are shown below. The owner of the restaurant uses a 10 percent after-tax discount rate. Net After-Tax Cash Inflows Cash Investment Outflow: Proposal Time 0 Years 1-10 Years 11-20 Mall restaurant $ 619,000 $76,000 $76,000 Downtown 266,000 47,000 restaurant "Includes after-tax cash flows from all sources, including incremental revenue, incremental expenses, and depreciation tax shield. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Compute the net present value of each alternative restaurant site. (Round your final answers to the nearest dollar.) Net Present Value Mall restaurant Downtown restaurant 2. Compute the profitability index for each alternative. (Round your answers to 2 decimal places.) Profitability Index Mall restaurant Downtown restaurant 3. How do the two sites rank in terms of NPV and the profitability index? NPV Profitablility Index Mall restaurant Downtown restaurant Step by Step Solution
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