Reference no: EM13567540

A company rents 40,000 square feet of space and is using 30,000 square feet for its present operations. It wishes to add a new division that will use the remaining 10,000 square feet. If it adds the division, equipment will cost $210,000 once, and the operations will generate $50,000 in profits every year. Presently, the office staff costs $160,000 per year. However, the expansion requires a larger staff, bringing costs up to $180,000 per year. If the cost of capital r = 10%, should the firm expand?