Determine which type of storage space should be used

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Reference no: EM131329467

A manufacturing company is in need of 1000 square meters of storage space for 3 years. The company is considering the purchase of land for $8 000 and erecting a temporary metal structure on it at a cost of $70 per square meter. At the end of the three year use period, the company expects to be able to sell the land for $9 000 and the building fot $12 000. Alternately, the company can lease storage space for $1.50 per square meter per month payable at the beginning of each year. The company's MARR is 20% per year. Using Present Worth Analysis determine which type of storage space should be used. Draw Cash Flow Diagram and carryout the decimal form of interest rates to 4 decimal places, and interest factors to 5 decimal places.

Reference no: EM131329467

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