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Question 3 With the introduction of new soaps and successfully completing their order for unique shampoo bars, Bubble Oasis has received numerous inquiries from wholesalers
Question 3 With the introduction of new soaps and successfully completing their order for unique shampoo bars, Bubble Oasis has received numerous inquiries from wholesalers and retailers in recent months and successful in obtaining quite a few large orders. Following discussions, the management is now contemplating incorporating EarthFresh soaps and PureCleanse bars into their product line at Bubble Oasis. This expansion requires more storage space, prompting the consideration of a larger factory that can accommodate increased raw material storage and boost production. To ensure an adequate supply of high-quality materials and meet delivery deadlines, the management is considering purchasing a purpose-built manufacturing facility with walk-in storage unit. Instead of continuing to rent their current factory, the management believes that owning a purpose-built facility will be more advantageous. To aid in their decision-making process, they have approached you, the management accountant, to gather relevant information for the purchase. The information collected can be found in Appendix C
Based on the provided information, evaluate, and assess the feasibility of purchasing a larger manufacturing facility for "Bubble Oasis." in the outer suburbs of Melbourne Additionally, consider whether "Bubble Oasis" should purchase the new facility/walk-instorage unit or opt for renting (why or why not) , along with other qualitative factors taking into account when utilizing Net Present Value (NPV) for decision making.