Solution-Estimates for four alternative building locations

Estimates for four alternative building locations

Reference no: EM13881960

Caterpillar Corporation wants to build a spare parts storage facility in the Phoenix, Arizona, vicinity. A plant engineer has identified four different location options. The initial cost of earthwork and prefab building and the annual net cash flows estimates are detailed in Table 8-5. The annual net cash flows series vary due to differences in maintenance, labor costs, transportation charges, etc. If the MARR is 10%, use incremental ROR analysis to select the one economically best location.

Estimates for Four Alternative Building Locations.

	A	B	C	D
Initial cost, $	-200,000	-275,000	-190,000	-350,000
Annual cash fl ow, $ per year	-22,000	-35,000	-19,500	-42,000
Life, years	30	30	30	30

Reference no: EM13881960

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Estimates for four alternative building locations

Reference no: EM13881960

Reference no: EM13881960

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