Straightforward net present value

Reference no: EM13758412

Straightforward net present value and internal rate of return

The City of Bedford is studying a 600-acre site on Route 356 for a new landfill. The startup cost has been calculated as follows:

Purchase cost: $450 per acre

Site preparation: $175,000

The site can be used for 20 years before it reaches capacity. Bedford, which shares a facility in Bath Township with other municipalities, estimates that the new location will save $40,000 in annual operating costs.

a. Should the landfill be acquired if Bedford desires an 8% return on its investment? Use the net-presentvalue method to determine your answer.

Reference no: EM13758412

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