Scenario 2: Bremily Firewood Company is expanding their operations. The company has an expansion budget of $1,000,000 to use for contracting with local land owners. The company can contract with one, multiple, or zero local land owners. Assum the company has a MARR of 10% per year. 2C. Use the following information to determine which land parcels Bremily should contract with. Assume there is only one of each land parcel available and each parcel has an expected life of 6 years. Land Parcel Initial Net Present Value Owner Cost Peterson $564,000 $473,000 Johnson $475,000 $351,000 Smith $268,000 $194,000 Jefferson $832,000 $609,000 What is the best land parcel, or combination of land parcels, for Bremily Company to contract with? Note: Enter you answer as the number of each parcel (0 or 1) the company should choose.
Scenario 2: Bremily Firewood Company is expanding their operations. The company has an expansion budget of $1,000,000 to use for contracting with local land owners. The company can contract with one, multiple, or zero local land owners. Assum the company has a MARR of 10% per year. 2C. Use the following information to determine which land parcels Bremily should contract with. Assume there is only one of each land parcel available and each parcel has an expected life of 6 years. Land Parcel Initial Net Present Value Owner Cost Peterson $564,000 $473,000 Johnson $475,000 $351,000 Smith $268,000 $194,000 Jefferson $832,000 $609,000 What is the best land parcel, or combination of land parcels, for Bremily Company to contract with? Note: Enter you answer as the number of each parcel (0 or 1) the company should choose.
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
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Transcribed Image Text:Scenario 2: Bremily Firewood Company is
expanding their operations. The company
has an expansion budget of $1,000,000 to
use for contracting with local land owners.
The company can contract with one,
multiple, or zero local land owners. Assume
the company has a MARR of 10% per year.
2C. Use the following information to
determine which land parcels Bremily
should contract with. Assume there is only
one of each land parcel available and each
parcel has an expected life of 6 years.
Land Parcel Initial
Owner
Net Present
Value
Cost
Peterson
$564,000
$473,000
Johnson
$475,000 $351,000
Smith
$268,000 $194,000
Jefferson
$832,000 $609,000
What is the best land parcel, or
combination of land parcels, for Bremily
Company to contract with? Note: Enter you
answer as the number of each parcel (0 or
1) the company should choose.
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