A construction firm is developing a large upscale

A construction firm is developing a large upscale residential community in the foothills outside of town. As part of the development streetlights need to be installed in each phase of the development. The firm must either pay a subcontractor to install the streetlights or else install the lights themselves. If the developer installs the lights themselves, they will need to purchase a large storage container for the lights and installation materials. The storage container will cost $30,000 and be depreciated over 3 years on a straight-line basis. Also, the developer will need to purchase $1,000 of new inventory, $500 of which will be on accounts payable. It will take three years to install all the streetlights in this development and the cost to install the lights will be $2,000 per year. When the project is over, the developer plans to sell the storage container for $5,000 and return the inventory and accounts payable to pre-project levels. The developer’s tax rate is 21%. Hiring a subcontractor will cost the developer $11,000 per year. If the developer’s weighted average cost of capital is 15%, what is the NPV of the developer installing the streetlights themselves? What is the IRR? Should the developer install the lights themselves or hire a subcontractor to do it?

How Our Website Works

1. FILL IN OUR SIMPLE ORDER FORM

It has never been easier to place your order. Fill in the initial requirements in the small order form located on the home page and press “continue” button to proceed to the main order form or press “order” button in the header menu. Starting from there let our system intuitively guide you through all steps of ordering process.

2. PROCEED WITH THE PAYMENT

All your payments are processed securely through PayPal. This enables us to guarantee a 100% security of your funds and process payments swiftly.

3. WRITER ASSIGNMENT

Next, we match up your order details with the most qualified freelance writer in your field.

4. WRITING PROCESS

Once we have found the most suitable writer for your assignment, they start working on a masterpiece just for you!

5. DELIVERY

Once finished, your final paper will be available for download through your personal dashboard. You will also receive an email notification with a copy of your paper attached to it. Sometimes, the writer may leave a note for you about the order in case there is any additional information that they need to give you.

Leave a Reply

Your email address will not be published.