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