Question

The Camino Real Landfill was required to install a plastic liner to prevent leachate from migrating into the groundwater. The fill area was 50,000 m2 and the installed liner cost was $8 per m2. In order to recover the investment, the owner charges to unload at the rates of $10 per pickup, $25 per dump truck, and $70 per compactor truck load. The fill area is adequate for 4 years. If the annual trafic is estimated to be 2500 pickup loads, 650 dump-truck loads, and 1200 compactor-truck loads, what rate of return will the landfill owner make on the investment? The rate of return that will be made by the landfill owner is ____% per year.

Answer 1

Answer:

25.25%

Explanation:

With a fill area of $50,000m^{2}$, and an installed liner cost of $8, the total cost of installation = 50,000 * 8 = $400,000.

Annual average annual cost = $400,000/4 = $100,000 (since the fill area is adequate for 4 years).

Estimated annual revenue = $P_{p}* V_{p} +P_{d}* V_{d}+P_{c}* V_{c}$

(P = Price, V = Value, p = Pick Up, d = Dump Truck, c = Compactor Truck)

= (10*2,500) + (25*650) + (70*1,200)

= $125,250.

Therefore, annual rate of return = $\frac{125,250}{100,000} - 1$ = 25.25%.