Option of building a warehouse

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Reference no: EM131603141

A company has the option of building a warehouse now or building it three years from now. The cost now would be $600,000, but three years from now the cost is estimated to be $750,000. If the company’s MARR (real i) is 18 % per year and the inflation rate is 8 % per year over the next three years, what is the present worth cost today of the $750,000 building purchased three years now when inflation is considered? (Enter your answer as a number without the dollar $ sign.)

Reference no: EM131603141

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