Fifteen families live in willow canyon

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Reference no: EM131806346

Fifteen families live in Willow Canyon. Although several water wells have been drilled, none has produced water. The residents take turns driving a water truck to a fire hydrant in a nearby town. They fill the truck with water and then haul it to a storage tank in Willow Canyon. Last year truck fuel and maintenance cost $3180. This year the residents are seriously considering spending $100,000 to install a pipeline from the nearby town to their storage tank. What rate of return would the Willow Canyon residents receive on their new water supply pipeline if the pipeline is considered to last

(a) Forever?

(b) 100 years?

(d) Would you recommend that the pipeline be installed? Explain.

Reference no: EM131806346

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