Applegate Industries is planning to expand its production facility in a few years. New plant             construction costs are estimated to be $4.50 per square foot. The company invests             $850,000 today at 8% interest compounded quarterly.                           a. How many square feet of new facility could be built after 3 1/2 years?                               Number of years =             Periods per year =             Nominal rate =             Interest rate per period =             Compounding periods =             Table factor =             Investment =             Compound amount =             Cost per square foot =             Square feet =                       b. If the company waits 5 years, but construction costs increase to $5.25 per             square foot, how many square feet could be built? What do you recommend?                               Number of years =             Compounding periods =             Table factor =             Compound amount =             Cost per square foot =             Square feet =                                         Recommendation:

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Applegate Industries is planning to expand its production facility in a few years. New plant
           
construction costs are estimated to be $4.50 per square foot. The company invests
           
$850,000 today at 8% interest compounded quarterly.
           
             
a. How many square feet of new facility could be built after 3 1/2 years?
           
             
   
Number of years =
       
   
Periods per year =
       
   
Nominal rate =
       
   
Interest rate per period =
       
   
Compounding periods =
       
   
Table factor =
       
   
Investment =
       
   
Compound amount =
       
   
Cost per square foot =
       
   
Square feet =
       
             
b. If the company waits 5 years, but construction costs increase to $5.25 per
           
square foot, how many square feet could be built? What do you recommend?
           
             
   
Number of years =
       
   
Compounding periods =
       
   
Table factor =
       
   
Compound amount =
       
   
Cost per square foot =
       
   
Square feet =
       
             
             
   
Recommendation:
       
             
             
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