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Homework: Doremus Decorative Doorknobs Doremus Decorative Doomobs is considering moving its manufacturing facility from Derville, New Jersey to Dover, Delaware. The new facility will begin
Homework: Doremus Decorative Doorknobs Doremus Decorative Doomobs is considering moving its manufacturing facility from Derville, New Jersey to Dover, Delaware. The new facility will begin manufacturing in Year 2. Moving the facility will require spending (cash out flow) Year 0 $850 1 $600 Should DDD move to Dover the Derville plant will be closed in Year 2 shut down costs will be $550 layoffs and environmental cleanup For Year 1, door knobs will continue to be manufactured in Derville. Discount Rate 7.50% 0 3 $300 4 $500 5 $700 6 $900 7 $900 8 $900 9 $900 10 $900 $100 Cash Flows for new Dover facility (excludes all move related spending) $80 $100 $150 $150 $150 $150 $150 $150 $150 $150 Cash flows from Derville (assuming no move to Dover) Should Doremus move from Derville to Dover
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