Please answer thefour accounting questions attached.

The supervisor of the county Department of Transportation (DOT) is considering the replacement of some machiner If the DOT accepts this investment proposal, disposal of the old machinery and investment in the new equipment wil Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: Prepare a net-present-value analysis of the county DOT's machinery replacement de Time 0 Acquisition cost Investment in working capital Recovery of working capital Salvage value of old machinery Salvage value of new machinery Annual operating cash savings Total cash flow Discount factor Present value Net present value Time 1 Time 2 Time 3 ment of some machinery. This machinery has zero book value but its current market value is $990. One possible alternative is n the new equipment will take place on December 31, 20x1. The cash flows from the investment will occur during the calendar y y replacement decision. The county has a 10 percent hurdle rate. (Round your "Discount fac Time 4 0. One possible alternative is to invest in new machinery, which has a cost of $40,900. This new machinery would produce estim will occur during the calendar years 20x2 through 20x5. nd your "Discount factors" to 3 decimal places and final dollar amounts to whole dollars. Neg chinery would produce estimated annual operating cash savings of $13,450. The estimated useful life of the new machinery is f o whole dollars. Negative amounts should be indicated by a minus sign.) e of the new machinery is four years. The DOT uses straight-line depreciation. The new machinery has an estimated salvage va has an estimated salvage value of $2,190 at the end of four years. The investment in the new machinery would require an addit nery would require an additional investment in working capital of $3,000, which would be recovered after four years. after four years. Washington County's Board of Representatives is considering the construction of a longer runway at t Cost of acquiring additional land for runway Cost of runway construction $ 84,000 285,000 Cost of extending perimeter fence 17,792 Cost of runway lights 46,000 Annual cost of maintaining new runway 23,000 Annual incremental revenue from landing fees 60,000 In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway w In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county's Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Compute the initial cost of the investment in the long runway. 2. Compute the annual net cost or benefit from the runway. 3-a. Determine the IRR on the proposed long runway. (Round your answer to the nearest whole percent.) 3-b. Should it be built considering IRR? Compute the initial cost of the investment in the long runway. Initial cost of investment Compute the annual net cost or benefit from the runway. Annual net benefit Determine the IRR on the proposed long runway. (Round your answer IRR % n of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A First, a longer runway will require a new snowplow, which will cost $185,000. The old snowplow could be sold now for $18,5 me horizon. The county's hurdle rate for capital projects is 19 percent. earest whole percent.) runway. nd your answer to the nearest whole percent.) small commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. ld be sold now for $18,500. The new, larger plow will cost $17,000 more in annual operating costs. Second, the County Boa many domestic flights. Data pertinent to the board's decision appear below. econd, the County Board of Representatives believes that the proposed long runway, and the major jet service it will bring t jet service it will bring to the county, will increase economic activity in the community. The board projects that the increased jects that the increased economic activity will result in $104,000 per year in additional tax revenue for the county. r the county. Washington County's Board of Representatives is considering the construction of a longer runway at t Cost of acquiring additional land for runway Cost of runway construction $ 84,000 285,000 Cost of extending perimeter fence 17,792 Cost of runway lights 46,000 Annual cost of maintaining new runway 23,000 Annual incremental revenue from landing fees 60,000 In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway w In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county's Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare a net-present-value analysis of the proposed long runway. 2. Should the County Board of Representatives approve the runway considering NPV? 3-a. Which of the data used in the analysis are likely to be most uncertain? 3-b. Which of the data used in the analysis are likely to be least uncertain Prepare a net-present-value analysis of the proposed long runway. (R Annual incremental benefit Annuity discount factor Present value of annual benefits Initial costs: Net Present Value Which of the data used in the analysis are likely to be most uncertain Cost of Acquiring land Annual cost of maintaining new runway Annual incremental revenue from landing fees Cost of new snow plow Cost of runway lights Annual additional tax revenue Salvage value of old snow plow Which of the data used in the analysis are likely to be least uncertain Annual additional tax revenue Annual cost of maintaining new runway Cost of Acquiring land Annual incremental revenue from landing fees Cost of runway lights Salvage value of old snow plow Cost of new snow plow of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A new st, a longer runway will require a new snowplow, which will cost $185,000. The old snowplow could be sold now for $18,500 horizon. The county's hurdle rate for capital projects is 19 percent. ng runway. (Round your "Annuity discount factor" to 3 decimal places. Nega most uncertain? (Select which of the following statements (is) are true by se east uncertain? (Select which of the following statements (is) are true by se all commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Da be sold now for $18,500. The new, larger plow will cost $17,000 more in annual operating costs. Second, the County Board o al places. Negative amounts should be indicated by a minus sign.) are true by selecting an "X".) are true by selecting an "X".) any domestic flights. Data pertinent to the board's decision appear below. ond, the County Board of Representatives believes that the proposed long runway, and the major jet service it will bring to th service it will bring to the county, will increase economic activity in the community. The board projects that the increased ec ts that the increased economic activity will result in $104,000 per year in additional tax revenue for the county. Washington County's Board of Representatives is considering the construction of a longer runway at t Cost of acquiring additional land for runway Cost of runway construction $ 84,000 285,000 Cost of extending perimeter fence 17,792 Cost of runway lights 46,000 Annual cost of maintaining new runway 23,000 Annual incremental revenue from landing fees 60,000 In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway w In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county's Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county's hurdle rate Required: Suppose the board builds the long runway and conducts the promotional campaig Required increase in tax revenue tion of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A n. First, a longer runway will require a new snowplow, which will cost $185,000. The old snowplow could be sold now for $18 me horizon. The county's hurdle rate for capital projects is 19 percent. n. The county's hurdle rate for capital projects is 19 percent. The County Board of Representatives believes that if the count romotional campaign. What would the increase in the county's annual tax revenue need to d small commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flight ould be sold now for $18,500. The new, larger plow will cost $17,000 more in annual operating costs. Second, the County Bo elieves that if the county conducts a promotional effort costing $28,500 per year, the proposed long runway will result in sub x revenue need to be in order for the proposed runway's internal rate of return to equal the on many domestic flights. Data pertinent to the board's decision appear below. Second, the County Board of Representatives believes that the proposed long runway, and the major jet service it will bring runway will result in substantially greater economic development than was projected originally. However, the board is uncerta eturn to equal the county's hurdle rate of 19 percent? (Round intermediate and final answe or jet service it will bring to the county, will increase economic activity in the community. The board projects that the increase ver, the board is uncertain about the actual increase in county tax revenue that will result. e and final answer to the nearest dollar amount.) rojects that the increased economic activity will result in $104,000 per year in additional tax revenue for the county. for the county. Time 0 Acquisition cost Investment in working capital Recovery of working capital Salvage value of old machinery Salvage value of new machinery Annual operating cash savings Total cash flow Discount factor Present value Net present value Time 1 -40900 -3000 0 990 0 0 -42910 1 -42910 Time 2 0 0 0 0 0 13450 13450 0.909 12,226.05 0 0 0 0 0 13450 13450 0.826 11,109.70 Time 3 0 0 0 0 0 13450 13450 0.751 10,100.95 Time 4 0 0 3000 0 2190 13450 18640 0.683 12,731.12 3257.82 1) Initial cost of investment 599,292 2) Annual net benefit 124,000 3-a) IRR 16% 3-b) No it should not be built considering IRR , since IRR is lower than hurdle rate Working Initial cost of investment Cost of acquiring additional land for runway Cost of runway construction Cost of extending perimeter fence Cost of runway lights Cost of new snow plow Salvage value of old snow plow Initial cost of investment 84000 285000 17792 46000 185000 -18500 599292 Annual incremental revenue from landing fees Additional Tax Revenue Annual cost of maintaining new runway Annual Operating cost of new larger low Annual incremental benefit 60000 104000 -23000 -17000 124,000 n hurdle rate 1) Annual incremental revenue from landing fees Additional Tax Revenue Annual cost of maintaining new runway Annual Operating cost of new larger low Annual incremental benefit Annuity discount factor Present value of annual benefits Initial costs: Cost of acquiring additional land for runway Cost of runway construction Cost of extending perimeter fence Cost of runway lights Cost of new snow plow Salvage value of old snow plow Net Present Value 60000 104000 -23000 -17000 124,000 4.339 538036 84000 285000 17792 46000 185000 -18500 2) No the County Board of Representatives approve the runway considering NPV as its NPV is Negative 3a) Cost of Acquiring land Annual cost of maintaining new runway Annual incremental revenue from landing fees Cost of new snow plow Cost of runway lights Annual additional tax revenue Salvage value of old snow plow X X X 3b) Annual additional tax revenue Annual cost of maintaining new runway Cost of Acquiring land Annual incremental revenue from landing fees Cost of runway lights Salvage value of old snow plow Cost of new snow plow X X X X 599292 -61256 Answer) Required increase in tax revenue 146618 Working Annual incremental revenue from landing fees Additional Tax Revenue Annual cost of maintaining new runway Annual Operating cost of new larger low Annual incremental benefit Annuity discount factor Present value of annual benefits Initial costs: Cost of acquiring additional land for runway Cost of runway construction Cost of extending perimeter fence Cost of runway lights Cost of new snow plow Salvage value of old snow plow Net Present Value before promotional campaigning 60000 104000 -23000 -17000 124,000 4.339 84000 285000 17792 46000 185000 -18500 Extra increase in tax revenue Extra increase in tax revenue Extra increase in tax revenue Net Present Value before promotional campaigning /Annui 61256/4.339 + 28500 42618 Required increase in tax revenue Required increase in tax revenue Required increase in tax revenue presently additional increase in tax revenue + Extra increase 104000+42618 146618 538036 599292 -61256 Value before promotional campaigning /Annuity Factor + Promotional effort cost ditional increase in tax revenue + Extra increase in tax revenue Time 0 Acquisition cost Investment in working capital Recovery of working capital Salvage value of old machinery Salvage value of new machinery Annual operating cash savings Total cash flow Discount factor Present value Net present value Time 1 -40900 -3000 0 990 0 0 -42910 1 -42910 Time 2 0 0 0 0 0 13450 13450 0.909 12,226.05 0 0 0 0 0 13450 13450 0.826 11,109.70 Time 3 0 0 0 0 0 13450 13450 0.751 10,100.95 Time 4 0 0 3000 0 2190 13450 18640 0.683 12,731.12 3257.82 1) Initial cost of investment 599,292 2) Annual net benefit 124,000 3-a) IRR 16% 3-b) No it should not be built considering IRR , since IRR is lower than hurdle rate Working Initial cost of investment Cost of acquiring additional land for runway Cost of runway construction Cost of extending perimeter fence Cost of runway lights Cost of new snow plow Salvage value of old snow plow Initial cost of investment 84000 285000 17792 46000 185000 -18500 599292 Annual incremental revenue from landing fees Additional Tax Revenue Annual cost of maintaining new runway Annual Operating cost of new larger low Annual incremental benefit 60000 104000 -23000 -17000 124,000 n hurdle rate 1) Annual incremental revenue from landing fees Additional Tax Revenue Annual cost of maintaining new runway Annual Operating cost of new larger low Annual incremental benefit Annuity discount factor Present value of annual benefits Initial costs: Cost of acquiring additional land for runway Cost of runway construction Cost of extending perimeter fence Cost of runway lights Cost of new snow plow Salvage value of old snow plow Net Present Value 60000 104000 -23000 -17000 124,000 4.339 538036 84000 285000 17792 46000 185000 -18500 2) No the County Board of Representatives approve the runway considering NPV as its NPV is Negative 3a) Cost of Acquiring land Annual cost of maintaining new runway Annual incremental revenue from landing fees Cost of new snow plow Cost of runway lights Annual additional tax revenue Salvage value of old snow plow X X X 3b) Annual additional tax revenue Annual cost of maintaining new runway Cost of Acquiring land Annual incremental revenue from landing fees Cost of runway lights Salvage value of old snow plow Cost of new snow plow X X X X 599292 -61256 Answer) Required increase in tax revenue 146618 Working Annual incremental revenue from landing fees Additional Tax Revenue Annual cost of maintaining new runway Annual Operating cost of new larger low Annual incremental benefit Annuity discount factor Present value of annual benefits Initial costs: Cost of acquiring additional land for runway Cost of runway construction Cost of extending perimeter fence Cost of runway lights Cost of new snow plow Salvage value of old snow plow Net Present Value before promotional campaigning 60000 104000 -23000 -17000 124,000 4.339 84000 285000 17792 46000 185000 -18500 Extra increase in tax revenue Extra increase in tax revenue Extra increase in tax revenue Net Present Value before promotional campaigning /Annui 61256/4.339 + 28500 42618 Required increase in tax revenue Required increase in tax revenue Required increase in tax revenue presently additional increase in tax revenue + Extra increase 104000+42618 146618 538036 599292 -61256 Value before promotional campaigning /Annuity Factor + Promotional effort cost ditional increase in tax revenue + Extra increase in tax revenue