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Washington County's Board of Representatives is considering the construction of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuterjets. A new, long runway would enable the airport to handle the midsizejets used on many domestic flights. Data pertinent to the board's decision appear below. Cost of acquiring additional land for runway $ 73.500 Cost of runway construction 233,066 Cost of extending perimeter fence 28,56? Cost of runway lights 39,000 Annual cost of maintaining new runway 19.500 Annual incremental revenue from landing fees 42.50% In addition to the preceding data. two other facts are relevant to the decision. First. a longer runway will require a new snowplow, which will cost $150,000. The old snowplow could be sold now for $15,000. The new, larger plow will cost $12,000 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway, and the majorjet service it will bring to the county. will increase economic activity In the community. The board projects that the increased economic activity will result In $118,000 per year in additional tax revenue for the county. In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county's hurdle rate for capita projects Is 23 percent. Use Appendix A for your reference. {Use appropriate factor(si from the tables provided.) juired: Compute the initial cost of the investment in the long runway. Compute the annual net cost or benefit from the runway. Determine the IRR on the proposed long runway. (Round your answer to the nearest whole percent.) Should it be built c Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Compute the initial cost of the investment in the long runway. Initial cost of investment Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Compute the annual net cost or benefit from the runway. 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? Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Req 3A Req 3B Determine the IRR on the proposed long runway. (Round your answer to the nearest whole percent.) IRR 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? Complete this question by entering your answers in the tabs below. Please see attached Req 1 Req 2 Req 3A Req 3 Should it be built considering IRR? IOYes ONO
