snowplow, which will cost $117,000. The old snowplow could be sold now for $10,850. The new, larger plow will cost$13,700 more in annual operating costs. Second, the County Board of Representatives believes that the proposed longrunway, and the major jet service it will bring to the county, will increase economic activity in the community. The boardprojects that the increased economic activity will result in $81,340 per year in additional tax revenue for the county.In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county's hurdle rate for capitalprojects is 12 percent.Use Appendix A for your reference.Note: Use appropriate factor(s) from the tables provided.PR 16-47 (Algo) Internal Rate of Return; Sensitivity Analysis (Section 1) (LO 16-1, 16-3)In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county's hurdle rate for capital projects is12 percent. The County Board of Representatives believes that if the county conducts a promotional effort costing $22,550 per year,the proposed long runway will result in substantially greater economic development than was projected originally. However, the boardis uncertain about the actual increase in county tax revenue that will result.Required:Suppose the board builds the long runway and conducts the promotional campaign. What would the increase in the county's annualtax revenue need to be in order for the proposed runway's internal rate of return to equal the county's hurdle rate of 12 percent?Note: Round your intermediate calculations and final answer to the nearest whole dollar.Required increase in tax revenue Use the following information to answer Problems 45-47 (Algo)[The following information applies to the questions displayed below.]Washington County's Board of Representatives is considering the construction of a longer runway at the county airport.Currently, the airport can handle only private aircraft and small commuter jets. A new, long runway would enable theairport to handle the midsize jets used on many domestic flights. Data pertinent to the board's decision appear below.Cost of acquiring additional land for runwayCost of runway constructionCost of extending perimeter fenceCost of runway lightsAnnual cost of maintaining new runwayAnnual incremental revenue from landing fees$78,500236,77032,47543,85031,40044,760In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway will require a newsnowplow, which will cost $117,000. The old snowplow could be sold now for $10,850. The new, larger plow will cost$13,700 more in annual operating costs. Second, the County Board of Representatives believes that the proposed longrunway, and the major jet service it will bring to the county, will increase economic activity in the community. The boardprojects that the increased economic activity will result in $81,340 per year in additional tax revenue for the county.In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county's hurdle rate for capitalprojects is 12 percent.Use Appendix A for your reference.Note: Use appropriate factor(s) from the tables provided.PR 16-47 (Algo) Internal Rate of Return; Sensitivity Analysis (Section 1) (LO 16-1, 16-3)In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county's hurdle rate for capital projects is12 percent. The County Board of Representatives believes that if the county conducts a promotional effort costing $22,550 per year,the proposed long runway will result in substantially greater economic development than was projected originally. However, the board

The internal rate of return is used to examine the investment's profitability. It is a percentage…

Answered: Suppose the board builds the long…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter1: An Introduction To Taxation And Understanding The Federal Tax Law

Section: Chapter Questions

Problem 10DQ

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[The following information applies to the questions displayed below.] Washington County's Board of Representatives is considering the construction of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Data pertinent to the board's decision appear below. Cost of acquiring additional land for runway Cost of runway construction Cost of extending perimeter fence Cost of runway lights Annual cost of maintaining new runway Annual incremental revenue from landing fees In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway will require a new snowplow, which will cost $105,000. The old snowplow could be sold now for $10,500. The new, larger plow will cost $6,000 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway,…
Use the following information to answer questions 45-47 [The following information applies to the questions displayed below.] Washington County's Board of Representatives is considering the construction of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Data pertinent to the board's decision appear below. Cost of acquiring additional land for runway Cost of runway construction Cost of extending perimeter fence Cost of runway lights Annual cost of maintaining new runway Annual incremental revenue from landing fees $ 60,000 305,000 53,937 30,000 15,000 20,000 In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway will require a new snowplow, which will cost $105,000. The old snowplow could be sold now for $10,500. The new, larger plow will cost $6,000 more in annual…
Washington County's Board of Representatives is considering the construction of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Data pertinent to the board's decision appear below. Cost of acquiring additional land for runway Cost of runway construction Cost of extending perimeter fence Cost of runway lights Annual cost of maintaining new runway $ 61,500 310,000 32,100 31,000 15,500 22,500 Annual incremental revenue from landing fees In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway will require a new snowplow, which will cost $110,000. The old snowplow could be sold now for $11,000. The new, larger plow will cost $6,500 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway, and the major jet service…
Washington County's Board of Representatives is considering the construction of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Data pertinent to the board's decision appear below. Cost of acquiring additional land for runway Cost of runway construction Cost of extending perimeter fence Cost of runway lights. Annual cost of maintaining new runway Annual incremental revenue from landing fees $ 76,500 219,610 31,855 42,850 30,600 43,640 In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway will require a new snowplow, which will cost $113,000. The old snowplow could be sold now for $10,650. The new, larger plow will cost $13,300 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway, and the major jet service…
Washington County’s Board of Representatives is considering the construction of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Data pertinent to the board’s decision appear below. Cost of acquiring additional land for runway $ 70,000 Cost of runway construction 200,000 Cost of extending perimeter fence 29,840 Cost of runway lights 39,600 Annual cost of maintaining new runway 28,000 Annual incremental revenue from landing fees 40,000 In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway will require a new snowplow, which will cost $100,000. The old snowplow could be sold now for $10,000. The new, larger plow will cost $12,000 more in annual operating costs. Second, the County Board of Representatives believes that the…
The city of Columbia is considering extending the runways of its municipal airport so that commercial jets can use the facility. The land necessary for the runway extension is currently a farmland that can be purchased for $350,000. Construction costs for the runway extension are projected to be $600,000, and the additional annual maintenance costs for the extension are estimated to be $22,500. If the runways are extended, a small terminal will be constructed at a cost of $250,000. The annual operating and maintenance costs for the terminal are estimated at $75,000. Finally, the projected increase in flights will require the addition of two air traffic controllers at an annual cost of $100,000. Annual bemefits of the runway extension have been estimated as follows: Rental receipts from airlines leasing space at the facility $325,000 $65,000 Airport tax charged to passengers $50,000 $50,000 Convenience benefit for residents of Columbia Additional tourism dollars for Columbia Apply the…
The city of Columbia is considering extending the runways of its municipal airport so that commercial jets can use the facility. The land necessary for the runway extension is currently a farmland that can be purchased for $350,000. Construction costs for the runway extension are projected to be $600,000, and the additional annual maintenance costs for the extension are estimated to be $22,500. If the runways are extended, a small terminal will be constructed at a cost of $250,000. The annual operating and maintenance costs for the terminal are estimated at $75,000. Finally, the projected increase in flights will require the addition of two air traffic controllers at an annual cost of $100,000. Annual benefits of the runway extension have been estimated as follows (shown): Apply the B–C ratio method with a study period of 20 years and a MARR of 10% per year to determine whether the runways at Columbia Municipal Airport should be extended.
A city that operates automobile parking facilities is evaluating a proposal toerect and operate a structure for parking in its downtown area. Three designs for a facility to be built on available sites have been identified as follows, where all dollar figures are in thousands: At the end of the estimated service life, the selected facility would be torn down and the land would be sold. It is estimated that the proceeds from the resale of the land will be equal to the cost of clearing the site. If the city's interest rate is known to be 10%, which design alternative would be selected on the basis of the benefit-cost criterion?
Please don't provide handwritten solution ....
The city of Valley View, California, is considering various proposals regarding the disposal of used tires. All proposals involve shredding, but the benefits differ in each plan. An incremental B/C analysis was initiated, but the engineer conducting the study left recently. PW of the AB/C Ratio when Compared with Alternatives Alternatives B/C Ratio Cost, $Millions P. Q R 10 1.1 2.83 Q 40 2.4 2.83 50 1.4 S 80 1.8 Fill in the blanks in the incremental B/C columns of the table. Use a 20-year study period and an interest rate of 8% per year. AB/C Ratio when Compared with Alternative Alternative PW of the Cost, $ Millions B/C Ratio P Q 10 1.1 Q 40 2.4 50 1.4 80 1.8
A bridge is to be constructed now as part of a new road. Engineers have determined that traffic density on the new road will justify a two-lane road and a bridge at the present time. Because of uncertainty regarding futureuse of the road, the time at which an extra two lanes will be required is currently being studied. The two-lane bridge will cost $200,000 and the fourlane bridge, if built initially, will cost $350,000. The future cost of widening a two-lane bridge to four lanes will be an extra $200,000 plus $25,000 for every year that widening is delayed. The MARR used by the highway department is 12% per year. The following estimates have been made of the times at which the four-lane bridge will be required: In view of these estimates, what would you recommend? What difficulty, if any, do you have in interpreting your results? List some advantages and disadvantages of this method of preparing estimates.
A municipality plans to build a new roadway that will decrease the amount of time it takes commuters to get from the South end of the city to the North end. The cost to construct the roadway is $13,900,000 It is estimated that the increased efficiency for commuters has a value of $2.11 per car, per day as a result of the decreased operating costs and less time commuting. The new roadway will be adjacent to a large forest. As a result, there is an expectation that there will be an increase of 12 chipmunk-car collisions each year at an estimated cost of $19,528 per collision. The new roadway will have maintenance requirements that will cost $260,800 per year. The life of the new roadway is 45 years and the discount rate is 5.00% What is the minimum average number of cars per day that must use the new roadway in order for the project to be worthwhile?

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