Logan,Incis Considering the Purchase of a Warehouse Directly Across the Street

question 14

Multiple Choice

Logan,Inc.is considering the purchase of a warehouse directly across the street from its manufacturing plant.Logan currently warehouses its inventory in a public warehouse across town.Rent on the warehouse and delivering and picking up inventory cost Logan $48,000 per year.The building will cost Logan $400,000.Logan will depreciate the building for 20 years.At the end of 20 years,the building will have a $125,000 salvage value.Logan's required rate of return is 10%.The building's net present value is

• A) $41,347
• B) $27,228
• C) $427,228
• D) $960,000

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Definitions:

Testicular Cancer

A type of cancer that originates in the testicles, the male reproductive glands located in the scrotum.

Palliative Effect

An approach to treatment aimed at relieving symptoms and improving the quality of life, without necessarily curing the disease.

Radiation

Energy that is emitted in the form of waves or particles, which can be natural or artificial and has applications in medicine, energy production, and various technologies.

Localized

Restricted to a specific area or region; not widespread or generalized.