The accountants pension plan app invests in infrastructure


The Accountant’s Pension Plan (APP) invests in infrastructure projects in publicprivate partnerships. The nature of these partnerships is very long term but they have steady rates of return supported by tax dollars. Consequently, APP will invest in any project as long as it returns 8% or more. They have an opportunity to invest in a plastic recycling plant east of Toronto. Washed and recycled plastic sells for $0.50 per kilogram. The plant will have a capacity of turning 10,000,000 kg of plastic garbage into 8,000,000 kg of recycled plastic. In addition, the city of Toronto will pay APP $0.10 per kilogram to take their plastic garbage under a contract that will last 15 years. APP will not have to pay any shipping costs either for garbage or recycled plastic. The plant will cost $11,000,000 to build and will have annual operating costs of $2,500,000 in salary and wages plus $1,000,000 in energy and other operating costs. APP will fund the entire project. please explain

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Financial Management: The accountants pension plan app invests in infrastructure
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