Company installs businesses of four different types

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An oil company plans to purchase a piece of vacant land on the corner of two busy streets for $70,000. On properties of this type, the company installs businesses of four different types.

2122_businesses of four different types.png

In each case, the estimated useful life of the improvements is 15 years. The salvage value for each is estimated to be the $70,000 cost of the land. The net annual income, after paying all operating expenses, is projected as follows:

1757_net annual income.png

(a) Construct a choice table for interest rates from 0% to 100%.

(b) If the oil company expects a 10% rate of return on its investments, which plan (if any) should be selected

Reference no: EM131808988

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