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(Ch5) MKBK Manufacturing Inc. is considering building plant in Middle Tennessee for making automdtive parts. The company may build a $20M facility now to handle

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(Ch5) MKBK Manufacturing Inc. is considering building plant in Middle Tennessee for making automdtive parts. The company may build a $20M facility now to handle anticipated market demand for the next 10 years. Alternatively, the company may build a $10M facility now and expand at the end of 4 and 7 years to take care of the anticipated increase market demands. The 4 and 7-year expansions will cost the company $8M and $6M respectively. If money is worth 10%, compute the PW of costs for both alternatives. n

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