Would you recommend that the pipeline be installed

Reference no: EM132161019

Question: 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: EM132161019

Questions Cloud

What rate of return would be obtained : A popular magazine offers a lifetime subscription for $200. Such a subscription may be given as a gift to an infant at birth.

Estimate the costs of going full time : Upon graduation, every engineer must decide whether to go on to graduate school. Estimate the costs of going full time to the university to obtain a master.

What rate of return will she receive as a result : One aspect of obtaining a college education is the prospect of improved future earnings in comparison to non-college graduates.

What rate of return did he receive on his investment : An investor bought 100 shares of Omega common stock for $9000. He held the stock for 9 years. For the first 4 years he received annual end-of-year dividends.

Would you recommend that the pipeline be installed : 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.

What is the rate of return for the machine : A new machine can be purchased today for $300,000. The annual revenue from the machine is calculated to be $67,000, and the equipment will last 10 years.

What is the internal rate of return for the investment : An apartment building in your neighborhood is for sale for $140,000. The building has four units, which are rented at $500 per month each.

What rate of return would investment produce : A mine is for sale for $240,000. It is believed the mine will produce a profit of $65,000 the first year, but the profit will decline $5000 a year after that.

What rate of return did she receive on her investment : An investor bought a one-acre lot on the outskirts of a city for $9000 cash. Each year she paid $80 of property taxes. At the end of 4 years.

User Account

All Pages