Question
Carla Vista, Inc. is considering the purchase of a warehouse directly across the street from its manufacturing plant. Carla Vista currently warehouses its inventory in
Carla Vista, Inc. is considering the purchase of a warehouse directly across the street from its manufacturing plant. Carla Vista currently warehouses its inventory in a public warehouse across town. Rent on the warehouse and delivering and picking up inventory cost Carla Vista $46080 per year. The building will cost Carla Vista $432000. Carla Vista will depreciate the building for 20 years. At the end of 20 years, the building will have a $120000 salvage value. Carla Vista's required rate of return is 10%. Click here to view the factor table. Using the present value tables, the building's net present value is (round to the nearest dollar)
$-39693.
$-21861.
$392307.
$921600.
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