Harrison township is studying a 700-acre site for a new

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Harrison Township is studying a 700-acre site for a new landfill. The new site will save $70,000 in annual operating costs for 10 years, as Harrsion currently uses the landfill of neighboring municipality. Other data are:

  • Purchase price per acre: $550
  • Site preparation costs:$110,000
  • Hurdle rate:6%
  • Ignore income taxes

Required:

A. Use the net-present-value method and determine whether the landfill should be aquired.

B. Determine the landfill's approximate internal rate of return

Reference no: EM13593424

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