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-present-value method to determine your answer. 
b. Compute the internal rate of return on this project. 

  • CreatedJuly 26, 2013
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