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Ivanhoe, Inc. is considering the purchase of a warehouse directly across the street from its manufacturing plant. Ivanhoe currently warehouses its inventory in a public
Ivanhoe, Inc. is considering the purchase of a warehouse directly across the street from its manufacturing plant. Ivanhoe currently warehouses its inventory in a public warehouse across town. Rent on the warehouse and delivering and picking up inventory cost Ivanhoe $41280 per year. The building will cost Ivanhoe $387000. Ivanhoe will depreciate the building for 20 years. At the end of 20 years, the building will have a $107500 salvage value. Ivanhoe's required rate of return is 11%. Click here to view the factor table. Using the present value tables, the building's net present value is (round to the nearest dollar) O $-58275. $825600. O $328725. O $-44945
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