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You have been asked to evaluate the profitability of building a new distribution center under the following conditions.1 The proposal is for a distribution center
You have been asked to evaluate the profitability of building a new distribution center under the following conditions.1 The proposal is for a distribution center costing $1,500,000. The facility has an expected useful life of 35 years and a net salvage value (net proceeds from its sale after tax adjustments) of $225,000 Annual savings (due to a better strategic location) of $227,000 are expected, annual maintenance and administrative costs will be $114,000 and annual income taxes are $43,000 Suppose that firms MARR is 12%. Determine the net present worth of the investment
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