You need to know whether the building of a new warehouse is justied under the...
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Accounting
You need to know whether the building of a new warehouse is justied under the following conditions: The proposal is for a warehouse costing $200,000. The warehouse has an expected useful life of 35 years and a net salvage value (net proceeds from sale after tax adjustments) of $35,000. Annual receipts of $37,000 are expected, annual maintenance and administrative costs will be $8,000/year, and annual income taxes are $5,000. Given the foregoing data, which of the following statements are correct?
(a)The proposal is justied for a MARR of 9%.
(b)The proposal has a net present worth of $152,512 when 6% is used as the interest rate.
(c)The proposal is acceptable, as long as MARR <= 11.81%.
(d)All of the preceding are correct
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