Quantum Logistics, Inc., a wholesale distributor, is considering the construction of a new warehouse to serve the southeastern geographic region near the Alabama-Georgia border. Three cities are being considered. After site visits and a budget analysis, the expected net income and initial costs associated with locating in each city have been determined. The life of the ware house is expected to be 12 years, with negligible salvage value. City Initial Cost Net annual income LaGrange $2,400,000 Auburn $2,050,000 Anniston $2,600,000 Interest rate is 15%. Use annual worth analysis to determine which one to recommend. $6,300,000 $5,000,000 $8,100,000
Quantum Logistics, Inc., a wholesale distributor, is considering the construction of a new warehouse to serve the southeastern geographic region near the Alabama-Georgia border. Three cities are being considered. After site visits and a budget analysis, the expected net income and initial costs associated with locating in each city have been determined. The life of the ware house is expected to be 12 years, with negligible salvage value. City Initial Cost Net annual income LaGrange $2,400,000 Auburn $2,050,000 Anniston $2,600,000 Interest rate is 15%. Use annual worth analysis to determine which one to recommend. $6,300,000 $5,000,000 $8,100,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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am. 52.
Transcribed Image Text:Quantum Logistics, Inc., a wholesale distributor, is considering the construction of a new
warehouse to serve the southeastern geographic region near the Alabama-Georgia border.
Three cities are being considered. After site visits and a budget analysis, the expected net
income and initial costs associated with locating in each city have been determined. The life of
the ware house is expected to be 12 years, with negligible salvage value.
City
Initial Cost
Net annual income
$2,400,000
$2,050,000
$2,600,000
Interest rate is 15%. Use annual worth analysis to determine which one to recommend.
LaGrange
Auburn
Anniston
$6,300,000
$5,000,000
$8,100,000
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