A building company plans to build a new warehouse. The cost of building the warehouseis an initial investment of 1500 thousand dollars, together with a further 250 thousanddollars at the end of each of the next two quarters.The building company will need to cover quarterly operating cost of 120 thousanddollars at the end of each of the next two quarters (first and second). After completionof the construction by the end of the second quarter, the warehouse will be sold for 2.5million dollars. Assuming that the annual interest rate is 4% compounded annually, find:(1) The present value of the building costs;(2) The present value of the operating costs;(3) The present value of the revenue; and(4) The internal rate of return of the project.(5) Do you think the company should carry out this project? Give your reason(s).

Given: Initial Investment=$1500000 Further investment=$250000 (Quarterly) Operating cost=$120000…

Answered: an initial investment of 1500 thousand…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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an initial investment of 1500 thousand dol ollars at the end of each of the next two qua The building company will need to cover ollars at the end of each of the next two qua the construction by the end of the second. illion dollars. Assuming that the annual into