Please this my third time posting this single question the q

Please this my third time posting this single question. the question is asking for required increase in tax revenue in$..... Please show all working?

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 $ 64,588 288,888 24,535 33,8ea 16,5e8 27,5e8 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 $120,000. The old snowplow could be sold now for $12,000. The new, larger plow will cost $8,000 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway, and the major jet service it will bring to the county, will increase economic activity in the community. The board projects that the increased economic activity will result in $80,000 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 Pre 7l Scare answer > 5 of 7

Solution

To calculate the required revenue increase for 10 year time horizon, we need to calculate the cash out flow at the beginning of year or at year 0.

Calculation of capital cost at year 0 -

Now, we have figure of total capital cost $ 510,035 at year 0 or at the beginning of year 1. We have another cost details i.e. variable or annual cost increase, but We will consider the same later.

Let’s calculate required annual minimum the amount of increase in revenue to cover the total capital cost $ 510,035 in 10 years period with internal rate of return or country\'s hurdel rate @ 14%.

To calculate the same we need to calculate factor

We divide the Capital cost by above total factor ( $ 510,035 / 5.2161 ) amount of revenue increase to cover capital cost is $ 97,781.

Considering the other annual cost and revenue details provided in question we need to adjust above amount as follows -

Increase in county\'s annual tax revenue need to be in order to for the proposed runway\'s internal rate of return to equal the county\'s hurdle rate of 14% is $ 122,781

Sr. No.	Particulars	Amount in $
1	Acquisition of additional land	$ 64,500
2	Runway construction	$ 280,000
3	Extending perimeter fence	$ 24,535
4	Runway light	$ 33,000
5	Net cost of snowplow	$ 108,000
Total capital cost	$ 510,035