Net present value analysis
The City of Geelong's Council is considering the purchase of a site for a new sanitary landfill. The purchase price for the site is $100 000 and preparatory work will cost
$34 200. The landfill would be useable for 10 years. The council hired a consultant, who estimated that the new landfill would cost the city $20 000 per year less to operate than the city's current landfill. The current landfill also will last 10 more years.
For a landfill project, the City of Geelong can borrow money at 4 per cent.
Calculate the net present value of the new landfill.

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The Answer of Net present value analysis
The City of Geelong's Council is considering the purchase of a site for a new sanitary landfill. The purchase price for the site is $100 000 and preparatory work will cost
$34 200. The landfill would be useable for 10 years. The council hired a consultant, who estimated that the new landfill would cost the city $20 000 per year less to operate than the city's current landfill. The current landfill also will last 10 more years.
For a landfill project, the City of Geelong can borrow money at 4 per cent.
Calculate the net present value of the new landfill.

Net Present Value Analysis