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

Cost of acquiring additional land for runway	$	$70,500
Cost of runway construction		230,000
Cost of extending perimeter fence		15,111
Cost of runway lights		37,000
Annual cost of maintaining new runway		18,500
Annual incremental revenue from landing fees		37,500

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 $140,000. The old snowplow could be sold now for $14,000. The new, larger plow will cost $10,500 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 $98,000 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 capital projects is 22 percent.

1. Compute the initial cost of the investement in the long runway.

Initial cost of investment

2. Compute the annual net cost or benefit from the runway.

3. Determine the IRR on the proposed long runway.

IRR

_______%

3-b. Should it be built considering IRR? Yes or No

Second Half of the problem:

In analyzing the runway proposal, the board has decided to use a 10 year time horizon. The county's hurdle rate for capital project is 22%. The county board of representatives believes that if the county conducts a promotional effort costing $23,000 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.

Required:

Suppose the board builds the long runway and conducts the promotional campaign. What would the increase in the county's manual 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 22%? Round intermediate and final answer to the nearest dollar amount.

Required increase in tax revenue

Note: Can you please tell me how the answers were calculated so I can understand ho