Required information [The following information applies to the questions displayed below.] The chief executive of Bankstown Airport, near Sydney, is considering approaching the Federal Airport Authority to request permission to construct a new, longer runway at the airport. Currently, the airport can handle only private aircraft and small jet commuters. A new, long runway would enable the airport to handle the mid-sized jets used on many budget domestic flights. Data pertinent to the decision are as follows: Cost of acquiring additional land for runway Cost of runway construction Cost of extending perimeter fence Cost of runway lights $ 70,000 200,000 29,840 39,600 Annual cost of maintaining new runway Annual incremental revenue from landing fees 28,000 1,04,000 In addition to the data given above, two other facts are relevant to the decision. First, a longer runway will require a new rolling machine, which will cost $100 000. The old roller can be sold now for $10 000. The new, larger roller will cost an additional $12 000 in annual operating costs. Second, the chief executive believes that the proposed long runway will ease the pressure on facilities at Sydney Airport, and increase the total level of aircraft activity, particularly leisure aircraft. In analysing the runway proposal, the chief executive has decided to use a 10-year time horizon. The hurdle rate for capital expenditure projects is 10 percent. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.)