WDI will be entitled to 50% of the net income before taxes, with the remaining 50% shared among the six municipalities. The municipalities will have the right to audit WDI's expenses related to the organic waste treatment facility or the calculation of net income before taxes. Equipment will be amortized over 30 years for the purposes of the calculation.

Customer and revenue projections are as follows:

2022 2023 2024 2025 2026 2027 2028

# single-family households 150,000 157,000 158,000 160,000 163,000 165,000 167,000 commercial customers

(in $'000s) $3,500 $3,600 $3,700 $3,800 $3,900 $4,000 $4,100

After 2028, the average number of single-family households is expected to grow by 0.5% each year. From 2028 to 2051, the average revenue from other commercial customers is expected to increase by 1%. Compost sales are expected to be $1,250,000 in 2022 and increase by inflation throughout the term of the contract. The organic waste disposal fees charged to the commercial customers and the selling prices for the compost can be very volatile, so these estimates represent the low end of the possible range.

Annual operating costs, net of savings from using biogas as fuel, will include collection costs of $6,000,000 and plant operating costs, before depreciation and including equipment maintenance, of $6,500,000. Employee salary and benefits are already included in these amounts. These costs will increase annually at the inflation rate. WDI's income rate tax is 26.5%. The expected inflation rate throughout the forecast period is 2%.

Expected rate of return 10%.

Perform a reasonable discounted cash flow analysis of the option,