Problem III The City of Dallas is studying a 700-acre site for a new landfill. The new site will save $70,000 in annual operating costs for 10 years, as Dallas currently uses landfills of neighboring municipalities. Other data are: Purchase price per acre: $550 Site preparation costs: $110,000 Hurdle rate: 6% Ignore income taxes. Year FV of $1 at 6% FV of an ordinary PV of $1 at annuity at 6% 6% 1 2. 3 4 5 1.060 1.124 1.191 1.263 1.338 1.419 1.504 1.594 1.690 1.791 1.000 2.060 3.184 4.375 5.637 6.975 8.394 9.898 11.491 13.181 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 PV of an ordinary annuity at 6% 0.943 1.833 1 2.673 3.465 4.212 4.917 5.582 6.210 6.802 7.360 8 9 10 Periods 1 2 3 4 5 6 7 8 9 10 Future Value of a Series of $1 Cash Flows 4% 8% 10% 12% 14% 16% 18% 20% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2.040 2060 2.080 2.100 2.120 2.140 2.160 2.180 2.220 3.122 3.184 3.246 3.310 3.374 3.440 3.506 3.372 3.640 4.247 4.375 4.506 4.641 4.779 4.921 5.067 5.215 3.368 5.416 5.637 5.867 6.105 6.353 6.610 6.877 7.154 7.442 6.633 6.975 7.336 7.716 8.115 8.536 8.977 9.442 9.930 7.898 8.394 8.923 9.487 10.089 10.730 11.414 12.142 12.916 9.214 9.898 10.637 11.436 12.300 13.233 14.240 15.327 16.499 10.583 11.491 12.488 13.580 14.776 16.085 17.519 19.086 20.799 12.006 13.181 14.487 15.938 17.549 19337 21.321 23.521 25.959 Present Value of a Series of Si Cash Flows 4% 8% 10% 12% 14% 16% 20% 0.962 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 1.886 1.833 1.783 1.736 1.690 1.647 1.605 1.566 1.328 2.775 2.673 2.577 2.487 2.402 2.322 2.246 2.174 2. 106 3.630 3.465 3.312 3.170 3.037 2.914 2.798 2.690 2.589 4.452 4.212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 5.242 4.917 4.623 4.353 4.111 3.889 3.685 3.498 3.326 6.002 5.582 5.206 4.868 4.564 4.288 4.039 3.812 3.605 6.733 6.210 5.747 5.335 4.968 4.639 4.344 4.078 3.837 7.435 6.802 6.247 5.759 5.328 4.946 4.607 4.303 4.031 8.111 7.360 6.710 6.145 5.650 5.216 4.833 4.494 4.192 Periods 1 2 3 4 6 7 8 9 10 Required: A. Use the net-present-value method and determine whether the landfill should be acquired. B. Determine the landfill's approximate internal rate of return, using the tables above