GoBulls Media Is Considering Opening a New Manufacturing Facility to Process

question 16

Short Answer

GoBulls Media is considering opening a new manufacturing facility to process and mail coupons to 660,000 households in the Tampa Bay area. The new facility will require an initial investment of $240,000 and an annual operating cost of $22,000. It will have a
$86,500 salvage value after 5 years. Calculate the net present worth of this investment if the company's minimum attractive rate of return is 5% per year, compounded monthly.