engineer economic analys etm 310 1
- An investment of $5000 in an Infotech common stock proved to be very profitable. At the end of 3 years the stock was sold for $30,000. What was the rate of return on investment?
2- Horizon Wireless must rebuild a cell tower recently destroyed by a tornado. If made of normal steel, the tower will cost $40,000 to construct and should last 18 years. Maintenance will cost $1,000 per year. If corrosion resistant steel is used, the tower will cost $50,000 to build and the annual maintenance cost will be reduced to $200 per year. Determine the IRR of building the corrosion resistant tower. If Horizon requires a return of 10% on its capital projects, which tower should they build?
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