Question
I need help with this question: Net Present Value Analysis and Qualitative Factors, Alternative Format.Pete's Plumbing Supplies would like to expand into a new warehouse
I need help with this question:
Net Present Value Analysis and Qualitative Factors, Alternative Format.Pete's Plumbing Supplies would like to expand into a new warehouse at a cost of $500,000. The warehouse is expected to have a life of 20 years, and a salvage value of $100,000. Annual costs for maintenance, insurance, and other cash expenses will total $60,000. Annual net cash receipts resulting from this expansion are predicted to be $115,000. TheRequired:
a. Find the net present value of this investment using the format presented in . Round to the nearest dollar.
2.Should the company purchase the new warehouse? Explain.
3.Provide one qualitative factor that might cause the company to reach a
different conclusion than the one reached in requirementb.
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