Sun Devil Inc

question 4

Essay

Sun Devil Inc. is building two small additions onto its corporate headquarters in Tempe in order to maximize its operating efficiency. The additions, which total 27,000 square feet, will attach to the east and south sides of its existing 66,000- square- foot headquarters. The construction costs are estimated to be $40 per square feet. The company estimates $60,000 per year in fixed costs (e.g., maintenance and insurance, etc.) and $3 per square foot in variable costs (e.g., utilities, etc.) for the additional facility. The market value of the additions is expected to be 33% of the construction costs at the end of 20 years. Determine the capital recovery cost and the EUAC of the two additions if the minimum attractive rate of return is 4% per year.

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Definitions:

Louis XIV

A monarch of the House of Bourbon who reigned as King of France from 1643 until his death in 1715, known for his absolute monarchy and the phrase "L'état, c'est moi."

Tribal Societies

Groups of people organized around kinship or other forms of obligation and identified by cultural and social unity, often living in traditional, pre-industrial societies.

Feudal Societies

Societies structured around a strict hierarchical system of lords, vassals, and serfs, prevalent in medieval Europe, where lands were held in exchange for service.

Traditional Authority

A form of leadership where power is legitimized by customs and traditional beliefs passed down through generations, often seen in monarchies or tribes.