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 Cost of runway construction Cost of extending perimeter fence Cost of runway lights Annual cost of maintaining new runway Annual incremental revenue from landing fees $ 82,500 280,000 19,908 45,000 22,500 57,500 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 $180,000. The old snowplow could be sold now for $18,000. The new, larger plow will cost $16,000 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 $94,000 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 18 percent. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare a net-present-value analysis of the proposed long runway. 2. Should the County Board of Representatives approve the runway considering NPV? 3-a. Which of the data used in the analysis are likely to be most uncertain? 3-b. Which of the data used in the analysis are likely to be least uncertain? 1 Dronara anet.nrocantralle anal cient the nranncari lana runav Required information 3-a. wnicn or the data used in the analysis are likely to be most uncertain 3-b. Which of the data used in the analysis are likely to be least uncertain? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req Req 3B Prepare a net-present-value analysis of the proposed long runway. (Round your "Annuity Negative amounts should be indicated by a minus sign Runway maintenance Incremental revenue from landing fees Incremental operating costs for new snow plow Additional tax revenue Annual incremental benefit Annuity discount factor Present value of annual benefits Initial costs: Less: Land acquisition Less: Runway construction Less: Extension of perimeter fence Less: Runway lights Less: New snow plow Add: Salvage value of old snow plow Net present value $ 0 Reqi Req 2 > signments 0 Saved Help Save & Exit Submit Check my work will bring to the county, will increase economic activity in the community. The board projects that the increased economic activity will result in $94,000 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 18 percent Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare a net-present-value analysis of the proposed long runway. 2. Should the County Board of Representatives approve the runway considering NPV? 3-a. Which of the data used in the analysis are likely to be most uncertain? ch of the data used in the analysis are likely to be least uncertain? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req 3A Reg 3B Which of the data used in the analysis are likely to be most uncertain? (Select which of th by selecting an "X".) Cost of acquiring land Annual cost of maintaining new runway Annual incremental revenue from landing fees Cost of new snow plow Cost of runway lights Annual additional tax revenue Salvage value of old snow plow will bring to the county, will increase economic activity in the community. The board projects that the increased economic activity will result in $94,000 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 18 percent. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare a net-present-value analysis of the proposed long runway. 2. Should the County Board of Representatives approve the runway considering NPV? 3-a. Which of the data used in the analysis are likely to be most uncertain? 3-b. Which of the data used in the analysis are likely to be least uncertain? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Which of the data used in the analysis are likely to be least uncertain? (Select which of th by selecting an "X".) Annual additional tax revenue Annual cost of maintaining new runway Cost of acquiring land Annual incremental revenue from landing fees Cost of runway lights Salvage value of old snow plow Cost of new snow plow
