Determine the irr of building the corrosion-resistant tower

Reference no: EM13560348

HZ Wireless must rebuild a cell tower recently destroyed by a tornado. A tower made of normal steel (NS) will cost $30,000 to construct and should last 15 years. Maintenance will cost $1000 per year. If corrosion-resistant steel (CRS) is used, the tower will cost $36,000 to build, but the annual maintenance cost will be reduced to $250 per year.

a. Determine the IRR of building the corrosion-resistant tower. (Hint: Calculate interest rates from 7% to 11% using formulae provided in tables).

b.If HZ requires a return of 9% on its capital projects, which tower should be chosen? (Use linear interpolation for the IRR between integral values).

c. If the design life is just 5 years, which tower should be chosen and why?

Reference no: EM13560348

Questions Cloud

Drawdown at an observation well 15m from the pumped : A confined aquifer 30.0m thick has been pumped from a fully penetrating well at a steady rate of 5,000 m^3/day for a long time. Drawdown at an observation well 15m from the pumped well is 3.0 m and a drawdown

Design a cantilever beam made of reinforced concrete : Design a cantilever beam made of reinforced concrete. The rectangular beam is 18 ft long and subjected to a uniformly distributed dead load of 1.5 kip/ft (not including the beam weight)

Calculate the mean value of f and an expression for its : The depth of water, H, behind a gravity dam is normally distributed with a mean of 100' and variance of 2,500 ft2. The total hydrostatic pressure against the dam is F=?H2/2, where ? is the unit weight of water (62.4 pcf).

Use the watch as a navigation : Use the watch as a navigation

Determine the irr of building the corrosion-resistant tower : Determine the IRR of building the corrosion-resistant tower. (Hint: Calculate interest rates from 7% to 11% using formulae provided in tables).

Employers are shifting more employee healthcare costs : Assignment Background: Employers are shifting more employee healthcare costs to employees. Answer these questions: What are the consequences of that change? Where does social responsibility of employers end and where does the need to operate more eff..

Estimate the particle size that will be collected with : A cyclone has been designed with an inlet width of 10cm and an inlet height of 6cm. The height of the main upper cylinder is 16cm and the height of the lower cone is 16cm. The inlet gas velocity is 16m/s and the particle density

Check that the nominal shear strength measurements are : Check that the nominal shear strength measurements are normally distributed and verify that there are no outliers in the sample data.

Order of potential impact and likelihood : Discuss the risks and rank them in order of potential impact and likelihood

User Account

All Pages