Question
Oriole, Inc. is considering the purchase of a warehouse directly across the street from its manufacturing plant. Oriole currently warehouses its inventory in a public
Oriole, Inc. is considering the purchase of a warehouse directly across the street from its manufacturing plant. Oriole currently warehouses its inventory in a public warehouse across town. Rent on the warehouse and delivering and picking up inventory cost Oriole $52800 per year. The building will cost Oriole $495000. Oriole will depreciate the building for 20 years. At the end of 20 years, the building will have a $137500 salvage value. Orioles required rate of return is 10%. Click here to view the factor table. Using the present value tables, the buildings net present value is (round to the nearest dollar)
$-25049.
$-7318.
$1056000.
$469951.
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