Question $21$ of $28$

a Investment $-$ End of Chapter Problem

$$ Management at TJX Companies is deciding whether to build a new goods distribution center. The distribution center will cost $$60$ million to build; the estimated additional first year revenue will be $$5$ million. The distribution center will last $50$ years, with a depreciation rate of $5\%$ per year. The opportunity cost of this investment is predicted to be $7\%$ interest earned.

a$.$ What is the present value of the stream of payments resulting from this potential new goods distribution center? Round to the nearest million.

$

million

b$.$ TJX build the distribution center because the cost exceeds the benefit