Lou Lewis, the president of Lewisville Company, has asked you to give him an analysis of the best use of a warehouse the company owns. Note: The company has a $33\%$ effective tax rate.

Lewisville Company is currently leasing the warehouse to another company for $$6,400$ per month on a year$-$to$-$year basis. $($Hint: Use the PV function in Excel to calculate, on an after$-$tax basis, the PV of this stream of monthly rental receipts.$)$

The warehouse$$s estimated sales value is $$235,000.$ A commercial realtor believes that the price is likely to remain unchanged in the near future. The building originally cost $$67,000$ and is being depreciated at $$2,200$ annually. Its current net book value $($NBV$)$ is $$8,200.$

Lewisville Company is seriously considering converting the warehouse into a factory outlet for furniture. The remodeling will cost $$170,000$ and will be modest because the major attraction will be rock$-$bottom prices. The remodeling cost will be depreciated over the next $5$ years using the double$-$declining$-$balance method. $($Note: Use the VDB function in Excel to calculate depreciation charges. The advantage of using the VDB$,$ rather than the DDB$,$ function is that there is a $($default$)$ option in the former that provides an automatic switch to the straight$-$line method when it is advantageous to do so$.)$