Investment-End of Chapter ProblemManagement at TJX Companies is deciding whether to build a new goods distribution center. The distribution center will cost$60 million to build; the estimated additional first year revenue will be $5 million. The distribution center will last 50 years,with a depreciation rate of 5% per year. The opportunity cost of this investment is predicted to be 7% interest earned.a. What is the present value of the stream of payments resulting from this potential new goods distribution center? Round tothe nearest million.$b. TJXmillionbuild the distribution center because the Refer to the interactive below:Imports and TradeGRAPHPrice of Computers ($)1,000885110113ImportsS domesticSETTINGSSupplyDemandTariff AmountNew Domestic EquilibriumResetWorld Price + TariffCALCULATIONSWorld PriceDomestic Quantity Supplied113Domestic Quantity Demanded187DdomesticLevel of Imports74187190Tariff Amount$15Quantity of ComputersTariff Revenue$1,110

1. Present Value of New Distribution Center: The present value calculation takes into account the…

Answered: Investment-End of Chapter Problem…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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