Contemporary Engineering Economics 6th Edition by Chan Park

تمرين 5

You need to know whether the building of a new warehouse is justified under the following conditions.
TABLE
The proposal is for a warehouse costing $250,000.
The warehouse has an expected useful life of 35 years and a net salvage value (net proceeds from sale after tax adjustments) of $50,000.
Annual receipts of $67,000 are expected, annual maintenance and administrative costs will be $12,000/year, and annual income taxes are $15,000.
Given the foregoing data, which of the following statements are correct
(a) The proposal is justified for a MARR of 15%.
(b) The proposal has a net present worth of $50,254 when 20% is used as the interest rate.
(c) The proposal is acceptable, as long as MARR 15.93%.
(d) All of the preceding are correct.