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Sensitivity analysis: Home Garden Inc. Home Garden Inc. is considering the construction of a distribution warehouse in West Virginia to service its east coast stores
Sensitivity analysis: Home Garden Inc. Home Garden Inc. is considering the construction of a distribution warehouse in West Virginia to service its east coast stores based on the following estimates: a. Determine the net present value of building the warehouse, assuming a construction cost of $20,000,000, an annual net cost savings of $4,000,000, and a desired r of return of 14%. Use the Present Value of $1 at Compound Interest and Present Value of Ordinary Annuity. Net present value $ X b. Determine the net present value of building the warehouse, assuming a construction cost of $25,000,000, an annual net cost savings of $2,500,000, and a desired r of return of 14%. Use the Present Value of $1 at Compound Interest and Present Value of Ordinary Annuity. If required, use the minus sign to indicate a negative net present value. Net present value $ X
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