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What the building net present value

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Question - Cullumber, Inc. is considering the purchase of a warehouse directly across the street from its manufacturing plant. Cullumber currently warehouses its inventory in a public warehouse across town. Rent on the warehouse and delivering and picking up inventory cost Cullumber $50880 per year. The building will cost Cullumber $477000. Cullumber will depreciate the building for 20 years. At the end of 20 years, the building will have a $132500 salvage value. Cullumber's required rate of return is 12%.

Using the present value tables, what the building's net present value?

a. $-96957.

b. $1017600.

c. $-83217.

d. $380043.

Reference no: EM133028931

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