Based on an internal rate of return analysis

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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. There are three cities being considered. After site visits and a budget analysis, the expected income and costs associated with locating in each of the cities have been determined. The life of the warehouse is expected to be 12 years and MARR is 15%/yr. Based on an internal rate of return analysis, which city should be recommended?

  City        Initial Cost           Net Annual Income 

  Lagrange              $1,260,000           $480,000 

  Auburn                 $1,000,000           $410,000 

  Anniston              $1,620,000           $520,000

Reference no: EM131059926

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