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Washington Countys 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 commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Data pertinent to the boards decision appear below.

Cost of acquiring additional land for runway	$	61,500
Cost of runway construction		310,000
Cost of extending perimeter fence		32,100
Cost of runway lights		31,000
Annual cost of maintaining new runway		15,500
Annual incremental revenue from landing fees		22,500

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 $110,000. The old snowplow could be sold now for $11,000. The new, larger plow will cost $6,500 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway, and the major jet 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 $72,000 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 countys hurdle rate for capital projects is 7 percent.

Required information

[The following information applies to the questions displayed below.]

Washington Countys 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 commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Data pertinent to the boards decision appear below.

Cost of acquiring additional land for runway	$	61,500
Cost of runway construction		310,000
Cost of extending perimeter fence		32,100
Cost of runway lights		31,000
Annual cost of maintaining new runway		15,500
Annual incremental revenue from landing fees		22,500

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 $110,000. The old snowplow could be sold now for $11,000. The new, larger plow will cost $6,500 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway, and the major jet 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 $72,000 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 countys hurdle rate for capital projects is 7 percent.

Chapter 16 assignments 0 Sovec Help Save & Exit Submit Check my work Required information Part 2 of 3 Rog 1 Reg 2 Rog JA Reg 3D Prepare a net-present-value analysis of the proposed long runway. (Round your "Annuity discount factor" to 3 decimal places. Negative amounts should be indicated by a minus sign.) 625 points eBook Print References 0 Annual incremental bunefit Annuity discount factor Presenl value of annual benefits Initial costs Net present value Reg 1 Reg 2 > Chapter 16 assignments 0 Seved Help Save & Exit Submit Check my work 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 $110,000. The old snowplow could be sold now for $11,000. The new, larger plow will cost $6,500 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway, and the major jet 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 $72,000 per year in additional tax revenue for the county Part 3 of 3 625 points In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county's hurdle rate for capital projects is 7 percent. Skinprd Use Appendix A for your reference. (Use appropriate foctor(s) from the tables provided.) eBook In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county's hurdle rate for capital projects is 7 percent. The County Board of Representatives believes that if the county conducts a promotional effort costing $31.000 per year, the proposed long runway will result in substantially greater economic development than was projected originally. However, the board Is uncertain about the actual increase in county tax revenue that will result. References Required: Suppose the board builds the long runway and conducts the promotional campaign. What would the Increase in the county's annual tax revenue need to be in order for the proposed runway's internal rate of return to equal the county's hurdle rate of 7 percent? (Round intermediate and final answer to the nearest dollar amount.) Required increase in lax revenue