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Company Alpha is considering building an aircraft maintenance facility in Arizona. The facility is to be evaluated over a three-year life. The company estimates that:
Company Alpha is considering building an aircraft maintenance facility in Arizona. The facility is to be evaluated over a three-year life. The company estimates that: The facility will help to generate sales of $100,000 for the first year, and then $110,000 in year 2, $130,000 in year 3. Annual fixed operating costs are expected to be $50,000. Variable cost is $10,000 in year 1, $10,500 in year 2, $11,025 in year 3. All required equipment such as machines, carts and trucks cost in total of $60,000, which will go through a straight-line depreciation down to zero value. The market value of the equipment at the end of the projects life is $37,000. The project would require
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