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Two sites are being considered for a new warehouse with costs and revenues as listed below. Assume a 10-year planning horizon for each site. Site
Two sites are being considered for a new warehouse with costs and revenues as listed below. Assume a 10-year planning horizon for each site. Site A Site B Initial Cost $9.2 M $8.1 M Annual Costs $1.0 M $0.9 M Annual Revenues $2.7 M $2.3 M (a) Using a MARR of 8%, which site would you select based on its PW? (b) What is the external rate of return (ERR) for site B using the MARR as the reinvestment rate
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