An oil company plans to purchase a large piece of vacant land for $95,000. There are four possible improvements with the following costs over and above the cost of the land: Conventional service station Automatic car wash with pumps A. Cost of $75,000 B. Cost of $230,000 C. Cost of $30,000 Discount self-service only D. Cost of $130,000 Service station with quick car wash In each case the estimated useful life is 15 years, and salvage value is the cost of the land. The net annual income, after paying all operating expenses is projected at: A. $23,000 B. $45,800 C $11,000 D. $28,500 If the company requires a 12% rate of return, what should they do? Numerical Solution: PW Cost EUAB Salvage A PWPW (PW PW) PW Computations: (Use back of facing page or Sheet 4 of 4, if necessary) B C D